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UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


SUPPLEMENT  TO  TREASURY  DECISIONS 

(T.  D.  2834) 


TREASURY  DEPARTMENT 

UNITED  STATES  INTERNAL  REVENUE 


REGULATIONS  No.  49 


REGULATIONS 

Promulgated  by  the 

COMMISSIONER  OF  INTERNAL  REVENUE 

With  the  Approval  o'  the 
SECRETARY  OF  THE  TREASURY 

Relating  to  the 

COLLECTION    OF    TAX 
TRANSPORTATION  AN 
OTHER   FACILITIES 

Title   V,    Sections   500,    501,    and 
502  OF  THE  Revenue   Act  of    1918 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


s 

So 

1919 


> 


« 


REGULATIONS  RELATING  TO  THE 

TRANSPORTATION  TAX 

Under  Title  V  of  the  Revenue  Act  of  1918. 

(Public,  No.  254,  Sixty-fifth  Congress.     H.  R.  12SG3.) 


CONTENTS. 

PART  I. 

DEFINITIONS. 

Section  500.  Imposition  of  tax. 

Page. 

Article   1.  Carrier 7 

2.  Transportation 7 

3.  Terms 7 

4.  General  rule 8 

5.  Tax  less  than  half  cent  disregarded 8 

PART  II. 
TRANSPORTATION  OF  PROPERTY  BY  FREIGHT. 

Section  500  (a).  Tax  on  freight  charges. 

Article    6.  Tax  under  revenue  act  of  191S 9 

7.  Transportation  completed  prior  to  Nov.  1,  1917 9 

8.  Service  in  respect  of  which  tax  is  assessed 9 

9.  Total  amount  of  charges  taxable 9 

10.  No  duplication  of  tax 10 

11.  Towage  charges 10 

12.  Carrier  shall  collect,  return,  and  remit  total  taxes  on  all 

charges  collected 10 

13.  Taxable  charges — In-transit  privileges 10 

14.  Taxable  charges 11 

15.  Charges  on  property  shipped  for  export  and  actually  ex- 

ported exempt  from  tax 11 

16.  Shipments    to    Porto    Rico,    Philippine    Islands,    Virgin 

Islands,  and  the  Canal  Zone 12 

17.  Property  imported 12 

18.  Import  shipments  from  adjacent  foreign  countries 12 

19.  Property  passing  through  the  United  States 12 

20.  Charges  on  such  property  taxable 13 

Section  501  (c).  Commodities  transported  without  collection  of  a  charge. 

Article  21.  Carrier 13 

22.  Basis  of  computation  of  tax 13 

23.  Effect  of  foregoing  provision 14 

24.  Stock  of  one  curporutiyu  owned  by  another 14 

8 


4  CONTENTS. 

Section  501  (c)— Continued.  Pa^g 

Article  25.  Application  of  tax 14 

26.  Federal-  control 15 

27.  Circus  trains 15 

28.  jMilk,  newspapers,  and  other  commodities 16 

29.  State  inspection  charges 16 

30.  Storage  charges 16 

31.  Blocking  and  staking  charges 16 

32.  Property  sold 10 

33.  Chartered  boats —  16 

34.  Combined  freight  and  express  service  or  facilities 16 

85.  Transportation  by  mechanical  motor  power  when  in  com- 
petition with  carriers  by  rail  or  water  of  property  by 

freight 17 

PART  III. 

TRANSPORTATION  OF  PACKAGES,  PARCELS,  OR  SHIPMENTS  BY 

EXPRESS. 

Section  500  (b).  Tax  on  freight  by  rail  or  water. 

Article  3G.  Application  of  tax 18 

37.  Application  of  tax 18 

PART  IV. 

TRANSPORTATION  OF  PERSONS. 

Section  500  (c).  Tax  on  transportation  of  persons. 

Article  38.  Application  of  tax 19 

39.  Regular  established  line 19 

40.  Round-trip  ticket 20 

41.  Commutation  and  season  tickets 20 

42.  Zone  system 20 

43.  Combination  fares 20 

44.  Tickets  bought  and  wholly  or  partially  unused  prior  to 

Nov.  1,  1917 20 

45.  Manner  of  evidencing  payment  of  tax  on  such  tickets 20 

46.  Special  provisions  relating  to  such  tickets 20 

47.  Partially  used  mileage  books  paid  for  before  Nov.  1,  1917 —  21 

48.  Provisions  I'elating  to  such  books 21 

49.  Mileage  books  purchased  in  the  United  States 21 

1)0.  Mileage  books  purchased  in  Canada  or  Mexico 21 

51.  Cash  fare.s 22 

52.  Party  tickets 22 

53.  Prepaid  orders 22 

54.  Exchange  orders 22 

65.  Steamship  orders 22 

66.  Excess  baggage - 23 

57.  Storage  of  baggage 23 

58.  Computation  of  tax 23 

59.  Corpses 23 

60.  Extra  fares  for  special  services  or  facilities 23 

61.  Chartered  cars  or  trains ^ 23 

62.  Cases  in  which  tax  does  not  apply 23 


CONTEISTTS.  6 

Section  500  (d).  Tax  on  amounts  paid  for  accommodations  in  parlor  or 

sleeping  cars  or  on  vessels. 

Pago. 

Article  63.  Accommodations  to  which  tax  applies 1^4 

64.  Accommodations  to  which  tax  does  not  apply 25 

65.  Duties  of  agents,  collecting  charges  on  behalf  of  carriers 

furnishing  such  accommodations 25 

PART  V. 

TRANSPORTATION  OF  OIL  BY  PIPE  LINE. 

Section  500  (e).  Tax  on  transportation  of  oil  by  pipe  line. 

Article  GG.  Definition  of  oil 26 

67.  Miscellaneous  provisions 26 

PART  VI. 

GOVERNMENTAL  EXEMPTION. 

Section  500  (h).  Governmental  exemption. 

Article  68.  Nature  of  exemption 27 

69.  Foreign  governments 27 

70.  Government  agencies 27 

71.  Evidences  of  right  to  exemption 27 

72.  Evidences  of  right  to  exemption 28 

73.  Ambassadors,  ministers,  and  diplomatic  representatives —  30 

74.  Cost-plus  contracts 31 

75.  Credentials 31 

76.  Forms  to  be  furnished 32 

77.  Lump-sum  Government  contracts 82 

78.  Exemption — Persons 32 

79.  Certificate  required  when  charges  paid 32 

SO.  Prepaid  charges 82 

81.  Indorsement  of  certificates 33 

82.  Separate  certificates 33 

83.  Carriers  to  record  and  file  certificates 33 

PAPtT  VII. 

PAYMENT,  COLLECTIONS,  AND  RETURN  PENALTIES. 

Section  501  (a).  Payment,  collection,  reporting,  returning,  and  remit- 
tance of  the  taxes — ^Penalties. 

Article  84.  Payment  of  taxes 34 

85.  Collection  of  taxes 34 

86.  Credit  arrangements 34 

87.  Records — Taxes    collected 34 

88.  Records — No  taxes  collected 34 

89.  Records — Adjustment  of  taxes 35 

90.  Records — Summaries  of  transactions 35 

91.  Return  and  remittance  of  taxes 35 

92.  Penalties 36 


REGULATIONS  RELATING  TO  THE  COLLECTION  OF  TAX  ON  TRANS- 
PORTATION AND  OTHER  FACILITIES. 


PART  I. 
GENERAL  DEFINITIONS. 

LAW  AND  REGULATIONS  RELATING  TO  TRANSPORTATION 

TAXES. 

The  revenue  act  of  1918,  Title  V,  section  500,  provides: 

That  from  and  after  April  1,  1919,  there  shall  be  levied,  assessed,  collected, 
and  paid,  in  lieu  of  the  taxes  imposed  by  section  500  of  the  revenue  act  of 
1917     ♦     *     *. 

Article  1.  Carrier. — The  word  "  carrier,"  as  used  in  Title  V  of  the 
revenue  act  of  1918,  is  held  to  mean  any  person,  corporation,  partner- 
ship, or  association  who  or  which,  for  hire,  furnishes  any  of  the 
transportation  services  or  facilities  described  or  referred  to  in  sub- 
divisions (a),  (b),  (c),  (d),  and  (e)  of  section  500  of  the  act. 

Art.  2.  Transjwrtatlon.—lliQ,  word  "  transportation,"  as  used  in 
Title  V  of  the  act,  means  the  movement  of  persons  and  property  by 
a  carrier,  including  all  services  and  facilities  rendered,  furnished,  or 
used  in  connection  with  such  movement  by  or  on  behalf  of  a  carrier. 
It  includes  receipt,  delivery,  elevation,  transfer  in  transit,  ventila- 
tion, refrigeration,  icing,  storage,  demurrage,  towage,  lighterage, 
trimming  of  cargo  in  vessels,  wharfage,  handling  of  property  trans- 
ported, feeding  and  watering  live  stock,  and  all  other  incidental  serv- 
ices and  facilities.  It  does  not  include  cartage  or  passengers'  meals 
or  hotel  accommodations. 

Art.  3.  Terms. — The  term  "  United  States,"  as  used  in  Title  V  of 
the  act,  means  only  the  States,  Alaska,  Hawaii,  and  the  District  of 
Columbia, 

The  term  "  person,"  as  used  in  the  act  and  in  these  regulations, 
includes  individuals,  partnerships,  corporations,  and  associations. 

The  term  "  Secretary,"  as  used  in  the  act  and  in  these  regulations, 
means  the  Secretary  of  the  Treasury. 

The  term  "  Commissioner,"  as  used  in  the  act  and  in  these  regu- 
lations, means  the  Commissioner  of  Internal  Revenue. 

The  term  "  collector,"  as  used  in  the  act  and  in  these  regulations, 
means  the  collector  of  internal  revenue. 

7 


8  TAX   ON  TKANSPOKTATION  AND  OTHER  FACILITIES. 

CHARGES  TAXABLE. 

Art.  4.  General  rule. — The  charges  in  respect  of  which  the  taxes 
under  subdivisions  (a),  (b),  (c),  (d),  and  (e)  of  section  500  must 
be  assessed  are  all  charges  for  transportation,  as  above  defined,  col- 
lected under  tariffs  filed  or  concurred  in  by  the  carrier  making  the 
charges,  with  a  Federal  or  State  regulating  authority,  provided, 
hoAvever,  that  if  a  carrier  has  not  filed  or  concurred  in  such  tariffs 
all  charges  collected  by  such  carrier  for  transportation,  as  above 
defined,  are  taxable. 

Art.  5.  7'ax  less  than  half  cen.t  disregarded. — ^In  computing  the 
amount  of  tax  to  be  paid  under  the  provisions  of  section  500,  a 
fractional  part  of  a  cent  shall  be  disregarded,  unless  it  amounts  to 
one-half  cent  or  more,  in  which  case  it  shall  be  increased  to  one 
(1)  cent.  No  tax  shall  apply  to  any  payment  for  freight  trans- 
portation in  the  sum  of  sixteen  (16)  cents  or  less. 


PART  II. 
TRANSPORTATION  OF  PROPERTY  BY  FREIGHT. 

Section  500,  subdivision  (a),  of  the  act  imposes — 

A  tax  equivalent  to  three  per  centum  of  the  amount  paid  for  the  transporta- 
tion by  rail  or  water  or  by  any  form  of  mechanical  motor  power  when  in  com- 
petition with  carriers  by  rail  or  water  of  property  by  freight  transported  from 
one  point  in  the  United  States  to  another ;  and  a  like  tax  on  the  amount  paid 
for  such  transportation  within  the  United  States  of  property  transported  from 
a  point  without  the  United  States  to  a  point  within  the  United  States. 

^  -^-v  EFFECTIVE  DATE  OF  THE  LAW.        \\<s 

Art.  6.  Tax  under  revenue  act  of  1918. — The  tax  under  the  revenue 
act  of  1918  is  in  lieu  of  the  tax  under  section  500  of  the  revenue  act 
of  1917,  and  in  the  the  case  of  the  transportation  of  i)roperty  by 
freight  the  rate  of  taxation  is  the  same  under  both  acts.  Tlie  pro- 
visions of  the  revenue  act  of  1917  are  effective  as  to  all  taxable 
services  or  facilities  furnished  between  midnight  of  October  31, 
1917,  and  midnight  of  iMarch  31,  1919 ;  the  provisions  of  the  revenue 
act  of  1918  do  not  apply  to  services  or  facilities  furnished  prior  to 
midnight  of  March  31,  1919,  but  do  apply  to  such  services  or  facili- 
ties furnished  subsequent  to  midnight  of  March  31,  1919. 

Art.  7.  Transportation  completed  prior  to  Noveniber  i,  1017. — The 
tax  under  the  revenue  act  of  1917  became  effective  November  1,  1917, 
and  accordingly  where  transportation  services  are  completed  prior  to 
that  date  no  tax  would  be  due  under  either  of  the  acts,  even  though 
the  transportation  charges  covering  such  services  are  paid  at  any  time 
after  November  1,  1917. 

SERVICES  AND  FACILITIES  TAXABLE. 

Art.  8.  Service  in  respect  of  which  tax  is  assessed. — The  tax  im- 
posed under  section  500  of  the  act  on  the  amount  paid  for  the  trans- 
portation of  property  by  freight  is  held  to  apply  to  each  and  every 
service  and  facility  rendered  by  or  on  behalf  of  carriers  in  connection 
"with  transportation,  as  herein  defined,  of  property  by  freight  from 
one  point  in  the  United  States  to  another. 

Art.  9.  Total  amount  of  charges  taxable. — Where  any  taxable 
charge,  as  defined  in  these  regulations,  is  collected  in  addition  to  the 

114310°— 19 2  9 


10  TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES. 

road  haul,  water  luuil,  or  road-and-water  haul  charge,  the  tax  shall 
apply  ou  the  total  auiouut  collected  by  the  carrier,  consisting  of  tlio 
road  haul,  water,  or  road-and-water  haul  charge  plus  all  taxable 
charges  collected  in  addition  thereto. 

Art.  10.  No  duplication  of  tax. — If  any  taxable  charge,  as  defined 
in  these  regulations,  be  included  in  the  road  haul,  water  haul,  or 
road-and-water  haul  charge  applying  to  any  shipment,  the  tax  ap- 
plies to  and  shall  be  collected  on  the  total  amount  collected,  and  no 
separate  or  additional  tax  shall  be  collected  on  the  taxable  amounts 
included  therein. 

When  an  express  company  furnishes  express  transportation  over 
transportation  facilities  of  another  carrier,  the  amounts  paid  by  the 
express  company  to  such  carrier  for  use  of  the  transportation  facili- 
ties are  not  subject  to  tax.  The  tax  is  imposed  only  upon  the  amounts 
paid  by  the  consignor  or  consignee  of  the  express  shipments. 

Art.  11.  Toioage  charges. — Towage,  if  a  part  of  transportation, 
is  subject  to  tax.  If,  however,  towage  is  performed  for  a  carrier  and 
paid  for  by  the  carrier  as  a  part  of  its  operating  expense,  the  charge 
is  not  taxable.  If  it  is  performed  for  a  shipper  either  direct  or  as  an 
agent  of  the  carrier  and  the  shipper  is  charged  for  the  services,  the 
amount  paid  therefor  is  taxable. 

Art.  12.  Carrier  shall  collect^  return,  and  remit  total  taxes  on  all 
charges  collected. — Whenever  one  carrier  collects  the  charge  or 
charges  for  freight  transportation  performed  in  part  by  or  on  behalf 
of  another  carrier  or  carriers,  such  carrier  shall  collect  the  tax  appli- 
cable to  such  taxable  charge  or  charges  and  return  and  remit  to  the 
proper  collector  of  internal  revenue  the  total  tax  collected. 

Art.  13.  Taxable  charges — In-transit  privileges. — In  the  collection 
of  taxable  charges  in  connection  with  in-transit  privileges,  it  is  the 
practice  of  some  carriers  to  collect  the  local  rate  to  the  transit  point 
and  upon  reshipment  to  refund  such  local  rate,  and  then  assess  the 
through  rate  from  point  of  origin  to  final  destination,  while  it  is  the 
practice  of  other  carriers  in  the  collection  of  such  charges  to  collect 
the  local  rate  to  the  transit  point  and  at  the  time  of  reshipment 
from  the  transit  point  to  assess  the  balance  of  the  through  rate. 
Various  other  adjustments  of  charges  are  common  in  connection  with 
the  in-transit  privileges.  As  a  general  rule,  to  govern  the  collection 
of  taxes  in  all  such  cases,  it  is  held  that  the  tax  must  be  collected  on 
the  charges  to  the  transit  point  at  the  time  such  charges  are  col- 
lected, and  that  whatever  basis  of  readjusting  the  charges  is  used 
at  the  time  of  reshipment  or  at  destination,  such  tax  must  be  collected 
by  the  carrier  adjusting  the  charges  as  remains  due  upon  the  net  tax- 
able charges  assessed  on  the  shipment  from  point  of  origin  to  destina- 
tion, including  the  charges  for  the  in-transit  privileges. 


TAX  OIT  TRA1TSP0RTATI02T  AlTD  OTHER  FACILITIES.  ll; 

[A.RT.  14.  Taxable  charges — Terminal  or  water  service. — ^Whenever 
a  taxable  charge,  in  connection  with  a  terminal  or  water  service,  is 
paid  by  one  carrier,  acting  for  the  consignor  or  consignee,  to  another 
carrier,  the  tax  applicable  shall  be  paid  by  the  former  carrier  to  the 
latter  carrier,  who  shall  return  and  remit  the  same  as  required  here- 
under. 

PROPERTY  EXPORTED. 

Aet.  15.  Charges  on  'property  shipped  for  export  and  actuoUy 
exported  exempt  from  tax. — Amounts  paid  for  the  transportation  of 
property  in  the  course  of  exportation  to  foreign  ports  or  places  are 
held  to  be  exempt  from  the  tax  imposed  under  section  500  of  the  act. 
Property  may  be  deemed  to  be  in  the  course  of  exportation  when  it 
moves  under  any  of  the  following  conditions : 

(a)  Under  a  through  export  bill  of  lading. 

(5)  Under  a  domestic  bill  of  lading  or  receipt  on  which,  at  point 
of  origin,  "  For  export "  is  marked  or  the  foreign  consignee  and 
destination  are  specified  (this  clause  does  not  apply  to  shipments  to 
Canada  or  Mexico.     See  paragraph  (<?)). 

((?)  Under  a  through  bill  of  lading  or  through  live-stock  contract 
to  a  place  in  Canada  or  Mexico. 

(<Z)  Under  a  domestic  bill  of  lading  or  receipt  marked  at  point  of 
origin  "  For  export,"  wherein  the  Food  Administration  Grain  Cor- 
poration, Director  of  Overseas  Transportation,  British  Admiralty, 
or  any  export  representative  of  the  United  States  or  of  a  foreign 
Government,  approved  by  the  Commissioner  of  Internal  Eevenue,  is 
named  as  consignee. 

Provided  that  in  either  case  (rt)  or  (5)  the  property  so  consigned 
be  delivered  to  a  vessel  clearing  to  a  foreign  port  or  place  and  a 
ship's  receipt  is  taken  therefor,  or,  in  case  (c),  the  property  so  con- 
signed be  delivered  at  a  place  in  Canada  or  Mexico,  or,  in  case  (fZ), 
the  property  so  consigned  be  delivered  to  such  consignee. 

If,  when  property  is  delivered  to  a  carrier  for  transportation,  it 
clearly  appears  that  such  goods  are  in  the  course  of  exportation,  as 
provided  in  clause  (a),  (6),  (c),  or  (r/),  no  tax  shall  be  collected  on 
the  amounts  of  any  otherAvise  taxable  charges  prepaid  upon  such 
property;  but,  unless  such  property  is  delivered  in  such  manner 
as  is  specified  in  the  proviso  to  such  clause,  the  total  transportation 
charges  on  such  property,  from  the  point  of  origin  to  destination  in 
the  United  States,  are  subject  to  the  tax,  and  such  tax  must  be  col- 
lected as  and  when  the  transportation  charges  thereon  are  collected, 
if  the  transportation  charges  be  billed  collect,  or,  upon  delivery  of  the 
consignment,  if  the  trans^^ortation  charges,  or  any  of  them,  be  i)re- 
paid. 


Igi.  TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES. 

Art.  1G.  Shipments  to  Porto  Rico,  Philippine  Islands,  Virgin 
IsJmids,  and  the  Canal  Zone. — Shipments  to  Porto  Rico,  the  Phil- 
ippine Islands,  the  Virgin  Islands,  and  the  Canal  Zone  arc  not  ex- 
port shipments.  But  the  rail  transpoi-tation  from  an  interior  point 
of  the  United  States  to  a  port  for  transshipment  to  Porto  Rico,  the 
Philippine  Islands,  and  the  Virgin  Islands  is  exempt  from  tax  by 
reason  of  specific  acts  of  Congress.  Property  will  be  deemed  to  be  in. 
the  course  of  transportation  to  these  localities  only  when  shipped 
under  the  conditions  described  in  article  15.  Transportation  of  ship- 
ments destined  to  the  Canal  Zone  is  not  exempt. 

PROPERTY  IMPORTED;  PROPERTY  PASSING  THROUGH  THE 

UNITED  STATES. 

Art,  17.  Profcrty  imported. — In  the  case  of  property,  whether 
moving  on  a  through  or  foreign  bill  of  lading  or  otherwise,  imported 
into  the  United  States,  the  tax  imposed  under  section  500  of  the  act 
applies  to  the  transportation  charges  wdiich  accrue  thereon  from 
point  or  place  of  entry  to  destination  within  the  United  States. 

The  tax  due  under  the  preceding  paragraph  shall  be  collected  as 
and  when  the  transportation  charges  thereon  are  collected  if  such 
charges  be  collected  within  the  United  States.  If  such  charges  be 
prepaid  outside  the  United  States,  and  not  paid  at  point  or  place  of 
entr}^,  such  tax  shall  be  collected  upon  delivery  of  the  shipment. 

Art.  18.  Import  ship7nents  from  adjacent  foreign  countries. — 
When  import  shipments  from  adjacent  foreign  countries  move  on 
through  rates,  and  there  are  no  established  divisions,  the  charges 
shall  be  prorated  on  a  mileage  basis,  and  the  transportation  tax  shall 
be  paid  and  collected  upon  that  proportion  of  the  amount  paid 
which  the  mileage  within  the  United  States  bears  to  the  mileage  of 
the  shipment  transported.  Wlien  there  are  established  divisions,  the 
transportation  tax  shall  be  paid  and  collected  upon  the  division 
accruing  for  the  transportation  from  the  border  point,  if  the  divi- 
sions are  based  on  the  border,  to  destination  within  the  United  States. 
If  divisions  are  not  based  on  the  border,  then  the  tax  shall  be  paid 
and  collected  upon  the  division  from  the  basing  point  nearest  the 
border  to  destination,  plus  or  minus  an  amount  computed  on  the 
mileage  from  such  basing  point  to  border. 

Art.  19.  Property  passing  through  the  United  States. — In  the 
case  of  property  passing  through  the  United  States  from  one  for- 
eign port  or  place  to  another  the  tax  does  not  apply.  If,  however, 
property,  while  so  passing  through  the  United  States,  be  reconsigned 
to  a  destination  within  the  United  States,  the  tax  applies  to  the  trans- 
portation charges  thereon  from  the  point  or  place  of  entry  to  such 
destination  within  the  United  States. 


TAX  ON  TEANSPOKTATIOI!?  AND   OTHER  FACILIOfilKS,.  13 

DOMESTIC  SHIPMENT  PASSING  THROUGH  A  FOREIGN  COUNTRY 

EN  ROUTE. 

Art.  20.  Charges  on  such  property  taxable. — If  a  shipment  hav- 
ing both  origin  and  destination  v^ithin  the  United  States  passes  out 
of  the  United  States  on  its  journey,  the  gross  transportation  charges 
from  point  of  origin  to  final  destination  are  nevertheless  subject  to 
the  tax. 

COMMODITIES  TRANSPORTED  WITHOUT   COLLECTION   OF  A 

CHARGE. 

Section  501,  subdivision  (c),  of  the  act  provides: 

The  taxes  imposed  by  section  500  sliall  apply  to  all  services  or  facilities  speci- 
fied in  sucti  section  wlien  rendered  for  liire,  whether  or  not  the  agency  ren- 
dering tliem  is  a  common  carrier.  In  case  a  carrier  (other  tlian  a  pipe  line) 
principally  engaged  in  rendering  transportation  services  or  facilities  for  hire 
does  not,  because  of  its  ownership  of  tlie  goods  transported,  or  for  any  other 
reason,  receive  tlie  amount  which  as  a  carrier  it  would  otherwise  charge,  such 
carrier  shall  pay  a  tax  equivalent  to  the  tax  which  would  be  imposed  upon  the 
transportation  of  such  goods  if  the  carrier  received  payment  for  sucli  trans- 
portation ;  such  tax,  if  it  can  not  be  computed  from  actual  rates  or  tariffs  of 
the  carrier,  to  be  computed  on  the  basis  of  the  rates  or  tariffs  of  other 
carrier  for  like  services  as  determined  by  the  Commissioner.  In  the  case 
of  any  carrier  (other  than  a  pipe  line)  the  principal  business  of  which 
is  to  transport  goods  belonging  to  it  on  its  own  account  and  which  only  inci- 
dentally renders  services  for  hire,  the  tax  shall  apply  to  such  services  or  facili- 
ties only  as  are  actually  rendered  by  it  for  hire. 

Art.  21.  Carrier. — Where  a  carrier  (other  than  a  pipe  line)  is  en- 
gaged principally  in  the  business  of  transporting  goods  belonging  to 
it  on  its  own  account  and  only  incidentally  renders  services  for  hire, 
the  tax  will  appl}^  only  to  such  services  as  are  actually  rendered  for 
hire.  However,  in  case  a  carrier  (other  than  a  pipe  line)  is  prin- 
cipally engaged  in  rendering  transportation  services  or  facilities  for 
hire  and  does  not,  because  of  its  ownership  of  the  goods  transported, 
or  for  any  other  reasons,  receive  the  amount  which  as  a  carrier  it 
would  otherwise  receive,  such  carriers  will  pay  the  tax  that  would  be 
imposed  upon  the  transportation  if  the  carrier  received  payment 
therefor. 

The  tax  applies  to  the  transportation  by  a  carrier  of  property  be- 
longing to  or  for  the  personal  use  of  any  of  its  officers,  agents,  or 
employees,  even  though  such  property  be  transported  free  of  charge. 

Art.  22.  Basis  of  comjjutation  of  tax. — In  the  cases  falling  within 
the  above-quoted  provision  of  section  501,  the  basis  of  the  computa- 
tion of  the  tax  shall  be  upon  the  legal  rates  or  tariffs  of  the  carrier 
and,  in  the  absence  thereof,  the  actual  rates  or  tariffs  of  other  carriers 
for  like  service.     If  the  basis  of  the  tax  can  not  be  readily  deter- 


14  TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES. 

mined  in  the  manner  stated,  the  facts  should  be  forthwith  reported 
by  the  carrier  to  the  Commissioner  of  Internal  Revenue  for  deter- 
mination by  him  of  the  basis  of  computation. 

TRANSPORTATION   OF  COMMODITIES  FOR  USE  OF  CARRIER  AS 

A  CARRIER. 

Section  501,  subdivision  (c),  of  the  act  provides: 

Nothing  in  this  or  the  preceding  section  shall  bo  construed  as  imposing  a 
tax  (1)  upon  the  transportation  of  any  commodity  which  is  necessary  for 
the  use  of  the  carrier  in  the  conduct  of  its  business  as  such,  and  is  intended  to 
be  so  used  or  has  been  so  used,  or  (2)  upon  the  transportation  of  company 
materials  transported  by  one  carrier,  which  constitutes  a  part  of  a  railroad 
system,  for  another  carrier  which  is  also  a  part  of  the  same  system. 

Art.  23.  Effect  of  foregoing  provision. — The  sole  effect  of  this  pro- 
vision of  the  act  is  to  exempt  from  the  tax  all  transportation  charges 
made  by  or  which  would  accrue  to  a  carrier,  were  such  charges  made 
by  that  carrier,  on  all  materials,  supplies,  or  other  commodities 
transported  hy  such  carrier  which  are  necessary  for  its  use  in  the 
conduct  of  its  business  as  such  carrier,  and  intended  to  be  or  having 
been  so  used. 

Art.  24.  Stock  of  one  corporation  oioned  hy  another. — The  fact 
that  all  or  part  of  the  capital  stock  of  a  corporation  is  owned  by 
another  corporation  does  not  affect  the  application  of  sections  500 
and  501  of  the  act  to  each  corporation  as  an  entity. 

Art.  25.  Application  of  tax. — The  tax  applies  to  all  transportation 
charges  made  by,  or  which  would  accrue  to,  a  carrier,  were  such 
charges  made  by  it,  on  all  materials,  supplies,  or  other  commodities 
transported  by  that  carrier  for  another  carrier,  even  though  such 
commodities  be  necessary  for  the  use  of  such  other  carrier  in  the  con- 
duct of  such  other  carrier's  business  as  such,  subject,  however,  to  the 
following  qualifications: 

(a)  As  provided  by  section  501  of  the  act,  the  tax  is  not  imposed 
"upon  the  transportation  of  company  material  transported  by  one 
carrier,  which  constitutes  a  part  of  a  railroad  system,  for  another 
carrier  which  is  also  a  part  of  the  same  system."  The  term  "  a  rail- 
road system  "  is  held  to  mean  two  or  more  railroads  and  such  other 
carriers  as  may  be  operated  in  conjunction  therewith,  all  such  rail- 
roads and  other  carriers  being  under  one  general  operating  manage- 
ment and  even  though  each  such  railroad  or  other  carrier  maintain 
its  corporate  identity. 

(&)  If  the  facilities  of  an  express  company  operating  on  the  line 
of  a  railroad  company  be  necessary  for  the  use  of  such  railroad  com- 
pany in  the  conduct  of  the  railroad  company's  business  as  such,  and 
if  the  railroad  company,  under  contract,  transports  commodities 


TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES.  15 

necessary  to  maintain  or  operate  such  facilities,  such  commodities 
being  intended  to  be  or  having  been  so  used,  and  the  raih'oad  com- 
pany makes  no  charge  for  such  transportation,  the  charges  which, 
but  for  such  arrangement,  would  have  accrued  on  such  transporta- 
tion are  exempt  from  the  tax. 

(c)  If  a  telegraph  or  telephone  line  or  lines  along  the  line  of  a 
railroad  company  be  necessary  for  the  use  of  such  railroad  company 
in  the  conduct  of  the  railroad  company's  business  as  such,  and  if 
the  railroad  company,  under  contract,  transports  commodities  neces- 
sary to  maintain  or  operate  such  telegraph  or  telephone  line  or  lines 
along  the  line  of  such  railroad  company,  such  commodities  being 
intended  to  be  or  having  been  so  used,  and  the  railroad  company 
makes  no  charge  for  such  transportation,  the  charges  which  but  for 
such  arrangement  would  have  accrued  on  such  transportation  are 
exempt  from  the  tax. 

(d)  If  a  terminal  or  yard  for  the  use  of  oiie  or  more  railroads, 
jointly  or  severally,  be  operated  under  the  management  of  a  ter- 
minal or  switching  company,  or  of  such  railroad  or  railroads,  and 
the  user  cost  therefor  to  them  be  based  on  either  gross  or  net  costs 
of  operation,  the  commodities  necessary  in  the  operations  of  such 
terminal  or  yard  shall,  as  respects  the  provisions  of  sections  500  and 
501,  be  considered  as  commodities  necessary  for  the  use  of  such  car- 
riers thereof;  and  the  tax  does  not  apply  to  the  transportation 
charges  for  such  commodities  if  transported  over  the  lines  of  such 
carriers.  If,  however,  a  terminal  or  yard  be  operated  under  its 
own  management  for  profit,  or  if  a  fixed  rental  be  charged  users 
or  tenants  for  services  rendered  by  the  terminal  or  switching  com- 
pany, the  tax  applies  to  the  transportation  charges  made  by  tenants 
or  users  on  such  commodities. 

(e)  The  transportation  tax  on  freight  charges  accruing  on  ship- 
ments of  company  material  carried  by  one  railroad  for  another 
should  be  collected  by  the  railroad  collecting  the  freight  charges 
from  the  railroad  owning  the  material. 

Art.  26.  Federal  control. — The  Federal  control  of  railroads  con- 
stitutes all  the  carriers  operated  by  the  Government  one  system 
within  the  meaning  of  this  exemption.  The  transportation  of 
company  material  transported  by  one  carrier  under  Federal  control 
for  another  carrier  also  under  Federal  control  is  not  taxable. 

Art.  27.  Circus  trains. — Where  a  lump-sum  charge  is  made  for 
the  transportation  of  a  circus  train,  which  carries  both  property  and 
persons,  the  3  per  cent  tax  applies  to  such  charge.  If,  however,  ad- 
vance passenger  transportation  is  included  in  such  lump  sum  charge, 
the  8  per  cent  tax  apjplies  to  such  portion  of  the  charge  as  represents 


16  TAX  ON   TRANSPORTATION   AND  OTHER  FACILITIES. 

tho  charge  for  advance  passenger  transportation,  and  the  3  per  cent 
tax  applies  to  tho  bahmce  of  the  hunp  sum  charge. 

Art.  28.  Milk^  netospapers,  and  other  commodities. — The  amounts 
paid  for  transportation,  other  than  by  express,  of  milk,  newspapers, 
and  other  commodities  are  subject  to  the  tax  of  3  per  cent. 

Whenever  two  or  more  tickets  for  the  transportation  of  commodi- 
ties are  sold  in  book  form  or  in  bulk,  the  tax  applies  to  the  aggre- 
gate amount  paid  for  the  tickets  so  purchased. 

Art.  29.  State  inspection  ch^vfjes. — State  inspection  charges  col- 
lected by  a  carrier  as  an  agent  of  the  State  are  not  amounts  paid  for 
transportation  services  and  are  not  subject  to  tax. 

Art.  30.  Storage  charges. — Amounts  paid  for  storage  if  a  part  of 
transportation  are  subject  to  tax.  Storage  after  delivery  to  owner 
is  not  a  part  of  transportation.  Storage  hj  or  in  behalf  of  a  carrier 
furnished  to  a  shipper  on  receipt  of  his  goods  for  shipment,  or 
storage  by  or  in  behalf  of  a  carrier  at  destination  before  delivery  to 
owner,  whether  in  outside  warehouse  or  otherwise,  is  a  part  of  trans- 
portation and  subject  to  tax. 

Art.  31.  Blocking  and  staking  charges. — Blocking  and  staking 
property  in  cars  if  furnished  by  or  in  behalf  of  a  carrier  is  part  of 
transportation,  and  charges  for  said  services  paid  by  either  the  con- 
signor or  consignee  of  the  property  are  subject  to  the  tax. 

Art.  32.  Property  sold. — If  a  consignment  of  property  trans- 
ported, including  baggage,  be  refused  or  unclaimed  and  sold  at  pub- 
lic or  private  sale  under  Federal  or  State  statutes  or  regulations,  or, 
in  the  absence  thereof,  under  the  rules  and  regulations  of  a  carrier,  or 
if  a  carload  of  property  or  a  perishable  consignment  be  sold  under 
emergency  conditions  for  the  benefit  of  whom  \t  may  concern,  then 
and  in  any  such  case  the  net  amount  realized  therefrom  shall  be  con- 
sidered the  transportation  charge  applicable  to  such  consignment,  and 
the  3  per  cent  tax  shall  apply  to  such  amount  and  be  paid  by  the  pur- 
chaser: Provided^  however^  That  if  such  amount  be  in  excess  of  the 
actual  transportation  charges  accruing,  on  such  consignment,  the  tax 
shall  not  appl}^  to  such  excess. 

Art,  33.  Chartered  hoats. — When  boats  are  chartered  and  the  per- 
son chartering  the  boats  transports  therein  his  own  property,  the 
amount  paid  for  chartering  such  boats  is  not  a  transportation  charge 
subject  to  the  tax. 

Art.  34.  Combined  freight  and  express  services  or  facilities. — ■ 
When  property  is  transported  between  two  points,  partly  by  freight 
and  partly  by  express,  the  3  per  cent  tax  applies  on  the  amount  paid 
for  the  freight  movement,  and  the  tax  of  1  cent  for  each  20  cents  or 
fraction  thereof  applies  on  the  amount  paid  for  the  express  move- 
ment. The  carrier  collecting  the  total  transportation  charges  shall 
collect,  report,  and  pay  the  total  tax  due. 


TAX  OF  TRANSPORTATION  AND  OTHER  FACILITIES.  17 

Art.  35.  Transportation  hy  mechanical  motor  power  when  in  com- 
petition with  carriers  hy  rail  or  water  of  property  'by  freight. — • 
Transportation  of  property  by  freight  by  mechanical  motor  power 
is  taxable  only  when  in  competition  with  carriers  by  rail  or  water. 
Wlien  property  is  transported  between  two  points  by  mechanical 
motor  power  and  rail  or  water  transport atioii  is  furnished  between 
the  same  points,  competition  is  deemed  to  exist  in  the  absence  of 
unusual  conditions. 

Transportation  of  household  goods  by  mechanical  motor  power  is 
transportation  of  property  by  freight.  If  such  transportation  is 
conducted  in  competition  with  transportation  by  rail  or  water,  it  is 
subject  to  the  transportation  tax. 

Wlien  the  amounts  charged  for  transportation  by  automobile  vans 
include  services  of  packing  and  unpacking  furniture,  carrying  goods 
up  and  down  stajrs,  moving  pianos,  safes,  etc.,  out  of  windows,  the 
tax  will  apply  to  the  entire  charge  made  for  the  service  unless  the 
amounts  can  be  apportioned  between  the  actual  transportation  charges 
and  the  other  charges. 
114310°— 19 3 


PART  III. 

TRANSPORTATION  OF  PACKAGES,  PARCELS,  OR  SHIP- 
MENTS BY  EXPRESS. 

Section  500,  subdivision  (b)  of  the  act.  imposes: 

A  tax  of  1  ccut  for  each  20  cents  or  fraction  thereof  of  the  amount  paid  to 
any  i^ersou  for  the  transportation  on  or  after  such  date,  by  rail  or  water  or  by 
any  form  of  mechanical  motor  power  when  in  competition  with  express  by  rail  or 
water,  of  any  package,  parcel,  or  sliipment,  by  express,  transported  from  one 
point  in  the  I'niled  States  to  another;  and  ti  like  tax  on  the  amount  paid  for 
such  transportation  within  the  United  States  of  property  transported  from  a 
point  without  the  United  States  to  a  point  within  the  United  States. 

Art.  3G.  Application  of  tax. — The  provisions  of  Parts  I  and  II 
hereof,  in  so  far  as  they  are  applicable  to  transportation  of  packages, 
parcels,  or  shipments  by  express  from  one  point  in  the  United  States 
to  another,  are  held  to  control  in  connection  with  the  application  of 
the  express  tax. 

If  the  facilities  of  a  railroad  company  on  the  line  of  which  an 
express  company  operates  be  necessary  for  the  use  of  such  express 
company  in  the  conduct  of  the  express  company's  business  as  such, 
and  if  the  express  company,  under  contract,  transports  commodities 
necessary  to  maintain  or  operate  such  facilities,  such  commodities 
being  intended  to  be  or  having  been  so  used,  and  the  express  com- 
pany makes  no  charge  for  such  transportation,  the  charges  which,  but 
for  such  arrangement,  would  have  accrued  on  such  transportation 
are  exempt  from  the  tax. 

Art.  37.  (a)  Transportation  by  express  by  mechanical  motor 
power  is  not  taxable  unless  in  competition  with  transportation  by  ex- 
press by  rail  or  water. 

(5)  A  company  engaged  in  transporting  baggage,  exclusivelj'-,  and 
which  does  not  transport  other  parcels  or  ^iackages,  is  not  engaged 
in  the  business  of  transporting  parcels  and  packages  by  express. 
18 


PART  IV. 

TRANSPORTATION  OF  PERSONS. 

Section  500,  subdivision  (c),  of  the  act  imposes: 

A  tax  equivalent  to  eight  per  centum  of  tlie  amount  paid  for  the  transporta- 
tion of  persons  by  rail  or  water,  or  by  any  form  of  mechanical  motor  power  on 
a  regular  established  line  when  in  competition  with  carriers  by  rail  or  water, 
from  one  point  in  the  United  States  to  another  or  to  any  point  in  Canada  or 
Mexico,  where  the  ticket  or  order  therefor  is  sold  or  issued  in  the  United 
States,  not  including  the  amount  paid  for  commutation  or  season  tickets  for 
trips  less  than  thirty  miles,  or  for  transportation  the  fare  for  which  does  not 
exceed  42  cents. 

SERVICES    AND    FACILITIES    TAXABLE— GENERAL    PROVISIONS. 

Art.  38.  Application  of  fax. — The  8  per  cent  tax  applies  to 
amounts  paid  for  transportation  of  persons  by  carriers,  as  follows : 

{a)  From  a  point  in  the  United  States  to  another  point  therein, 
even  though  the  persons  pass  out  of  the  United  States  in  the  course 
of  such  transportation. 

(b)  From  a  point  in  the  United  States  to  a  point  in  Canada  or 
Mexico,  where  the  ticket  or  order  therefor  is  sold  or  issued  in  the 
United  States. 

(c)  From  a  point  in  the  United  States  to  another  point  therein, 
or — ^where  the  ticket  is  sold  or  issued  in  the  United  States — from  a 
point  in  the  United  States  to  a  point  in  Canada  or  Mexico,  when 
such  transportation  is  part  of  through  transportation  to  or  from  a 
foreign  country,  other  than  Canada  or  Mexico. 

The  tax  is  held  to  apply  to  each  and  every  service  and  facility, 
except  passengers'  meals  and  hotel  accommodations,  rendered  by  or 
on  behalf  of  carriers  in  connection  with  transportation,  as  herein 
defined,  of  persons,  where  the  transportation  in  connection  with 
which  the  service  or  facility  is  rendered  is  subject  to  the  tax. 

Art.  39.  Regular  estahlished  line. — The  phrase  "  a  regular  estab- 
lished line"  as  used  in  section  500,  subdivision  (c),  is  held  to  mean  a 
regularity  of  operation  of  transportation  facilities  by  motor  power 
between  definite  points.  If  such  motor  transportation  is  furnished 
with  regularity  between  points  which  are  connected  by  rail  or  water 
routes,  it  is  not  necessary  that  the  automobile  or  motor  transporta- 
tion pursue  a  specified  route  of  travel.  The  regularity  of  operation 
of  the  motor  transportation  is  the  essential  element  of  "  a  regular 
established  line." 

19 


20  TAX   ON   TRANSPORTATION   AND   OTHER  FACILITIES. 

Art.  40.  Ronnd-trlp  ticket. — The  tax  applies  to  the  amount  paid 
for,  or  applicable  to,  such  transportation,  including  the  charge  paid 
for  a  round-trip  ticlcet,  provided  such  mnount  is  in  excess  of  42  cents. 

Art.  41.  Commi<tat'wn  and  season  tickets. — The  term  "commuta- 
tion or  season  tickets,"  as  used  in  section  500,  subdivision  (c)  of  the 
act,  is  held  to  include  all  forms  of  tickets  issued  and  intended  for 
use  for  a  certain  number  of  trips  between  two  given  termini,  Avhether 
limited  or  milimited  as  to  the  time  in  which  they  are  to  be  used. 

The  phrase  ''  for  trips  less  than  thirty  miles,"  as  used  in  said  sub- 
division of  the  act  in  connection  with  commutation  and  season  tickets, 
is  held  to  mean  for  less  than  30  constructive  miles  in  instances  where 
the  rate  for  transportation  is  fixed  on  the  constructive  mileage. 

Art.  42.  Zone  system. — If  a  person  pays  or  a  carrier  collects  the 
fare  for  a  continuous  journey  at  intervals  in  amounts  of  less  than  42 
cents,  as  in  the  zone  system,  the  tax  must  be  collected  on  the  total 
charges  from  starting  point  to  final  destination  of  such  person,  if  the 
charges  aggregate  43  cents  or  more. 

Art.  43.  Comhination  fares. — In  cases  in  which  continuous  trans- 
portation is  secured,  either  by  the  use  of  the  same  or  different  kinds 
or  classes  of  tickets  or  by  the  use  of  such  tickets  in  connection  with  a 
cash  fare,  the  tax  applies,  provided  the  total  amount  paid  for  such 
transportation  exceeds  42  cents. 

SERVICES   AND   FACILITIES  TAXABLE— MISCELLANEOUS   PRO- 
VISIONS. 

Art.  44.  Tickets  hought.^  and,  wholly  or  imrtiaUy  unused.,  'prior  to 

November  i,  1917 — The  ^.c^.— Section  501,  subdivision  (b)  of  the  act, 

in  part  provides : 

If  a  ticket  (otlier  thau  a  mileage  book)  was  bought  and  partially  used  before 
November  1,  1917,  it  shall  not  be  taxed,  but  if  bought  but  not  so  used  before 
section  500  takes  effect,  it  shall  not  be  valid  for  passage  until  the  tax  has  been 
paid  and  such  payment  evidenced  on  the  ticket  in  such  manner  as  the  Com- 
missioner, with  the  approval  of  the  Secretary,  may  by  regulation  prescribe. 

Art.  45.  Manner  of  evidencing  payment  of  tax  on  such  tickets. — 
Payment  of  the  8  per  cent  tax  upon  tickets  bought  but  not  used  prior 
to  November  1,  1917,  shall  be  evidenced  by' indorsement  thereon  by 
and  over  the  signature  and  title  of  the  employee  collecting  the  ticket, 
showing  the  payment  of  the  tax. 

Art.  46.  Special  provisions  relating  to  such  tickets. — Employees 
collecting  such  tickets  presented  for  passage  must  require  the  pay- 
ment of  taxes  on  any  ticket,  excluding  commutation  and  season 
tickets,  the  sale  date  of  which  is  prior  to  November  1,  1917,  unless 
such  ticket  and  the  conditions  under  which  it  is  presented  conclu- 
sively show  that  the  ticket  has  been  used  prior  to  November  1,  1917, 
for  a  part  of  the  journey  called  for  by  it.    If  the  return  portion  of  a 


TAX  OF  TRAFSPOETATIOIT  AlTD  OTHER  FACILITIES.  21 

round-trip  ticket  sold  before  November  1,  1917,  be  presented  for  a 
continuation  of  the  journey,  the  tax  does  not  apply.  Commutation 
or  season  tickets  sold  and  partially  used  before  November  1,  1917,  are 
not  taxable  if  presented  after  that  date  for  the  remainder  of  the 
journey  or  journe5^s  called  for. 

Art.  47.  Partially  used  mileage  hoohs  paid  for  hefore  November  7, 
1917 — The  act. — Section  501,  subdivision  (b)  of  the  act,  among  other 
things,  provides: 

If  a  mileage  book  used  for  such  transportation  or  accommodation  was  pur- 
chased before  November  1,  1917,  or  if  cash  fare  is  paid,  the  tax  imposed  by  sec- 
tion 500  shall  be  collected  from  the  person  presenting  the  mileage  book,  or 
paying  the  cash  fare,  by  the  conductor  or  other  agent,  when  presented  for  such 
transportation  or  accommodation,  and  the  amount  so  collected  shall  be  paid  to 
the  United  States  in  such  manner  and  at  such  times  as  the  Commissioner,  with 
the  approval  of  the  Secretary,  may  prescribe. 

Art.  48.  Provisions  relating  to  such  hooJcs. — The  provision  applies 
whether  the  mileage  book  was  purchased  in  the  United  States, 
Canada,  or  Mexico. 

Amounts  collected  pursuant  to  the  above-quoted  provisions  shall 
be  reported  and  returned  as  herein  prescribed  in  respect  of  other 
charges  collected  by  carriers  for  transportation  of  persons. 

If  a  mileage  book  sold  in  the  United  States  prior  to  November  1, 
1917,  be  presented  for  a  mileage  exchange  ticket,  or  on  a  train  for 
transportaion,  the  8  per  cent  tax  applies  on  the  sale  value  of  the 
coupons  or  scrip  remaining  in  such  book,  and  shall  be  collected  by 
the  employee  to  whom  such  book  is  presented  for  transportation ;  evi- 
dence of  the  payment  of  such  tax  shall  be  indorsed  thereon  by  and 
over  the  signature  and  title  of  the  employee  collecting  the  tax. 

Art.  49.  Mileage  hoohs  purchased  in  the  United  States. — The  8 
per  cent  tax  applies  to  the  gross  amount  paid  for  a  mileage  book,  as 
and  when  collection  is  made  therefor. 

If  an  evidence  of  right  to  exemption  be  delivered  to  the  carrier  at 
the  time  of  purchase  of  a  book,  such  book  shall  be  stamped  "  Exempt 
from  tax." 

Art.  60.  Mileage  hoohs  purcha.sed  in  Canada  or  Mexico. — The  8 
per  cent  tax  applies  to  the  amount  paid  for  the  coupons  lifted  in  the 
United  States  from  mileage  books  purchased  in  Canada  or  Mexico 
when  used  for  transportation  {a)  from  one  point  in  the  United  States 
to  another,  even  though  such  journey  involve  passing  out  of  the 
United  States,  or  (6)  from  a  point  in  the  United  States  to  any  point 
in  Canada  or  Mexico,  or  [c)  from  a  point  in  the  United  States  to 
another  point  therein  or  to  a  point  in  Mexico  or  Canada,  when  suck 
transportation  is  part  of  through  transportation  to  or  from  a  foreign 
country  other  than  Canada  or  Mexico,  and  shall  be  collected  when 
the  coupons  are  lifted. 


22  TAX  OlSr  TEANSPORTATION  AND  OTHER  FACILITIES. 

The  tax  does  not  apply  to  the  amount  paid  for  the  coupons  lifted 
from  mileage  books  purchased  in  Canada  or  Mexico  when  used  for 
throuoh  transportation  from  a  point  in  Canada  or  Mexico  to  a  point 
in  the  United  States. 

Art.  51.  The  8  per  cent  tax  applies  to  all  cash  fares  paid  on  traiiLs 
from  a  point  in  the  United  States  to  a  point  in  the  United  States, 
Canada,  or  Mexico,  provided  the  total  cash  fare  for  a  continuous 
journey  exceeds  42  cents. 

Art.  52.  Party  tickets. — The  8  per  cent  tax  applies  to  the  total 
amount  paid  for  a  party  ticket. 

Art.  53.  Prepaid  orders. — The  taxes  applicable  to  amounts  paid 
for  transportation,  as  Avell  as  the  taxes  applicable  to  amounts  paid 
for  accommodations  in  sleeping  and  parlor  cars  and  on  vessels,  apply 
in  like  manner  to  amounts  paid  for  prepaid  orders  calling  for  such 
transportation  and  accommodations,  or  either  of  them.  The  ticket 
for  the  transportation  covered  by  a  prepaid  order  shall  be  deemed 
sold  and  issued  at  the  point  where  the  initial  carrier's  transportation 
begins. 

Where  a  carrier  or  agency,  in  collecting  the  amount  paid  for 
such  prepaid  order,  acts  on  behalf  of  any  or  all  of  the  several  carriers 
who  are  to  furnish  the  services  or  facilities  covered,  the  carrier  or 
agency  first  referred  to  shall  collect  the  taxes  on  the  total  charges  for 
such  prepaid  order  as  and  when  such  charges  are  collected,  and  remit 
such  total  charges  and  taxes  to  the  initial  carrier  issuing  the  ticket, 
and  the  initial  carrier  shall  return  and  pay  such  taxes. 

Art.  54.  Exchange  orders. — Where  an  exchange  order  is  issued  in 
the  United  States,  Canada,  or  Mexico,  as  part  of  or  in  connection 
with  through  transportation,  the  ticket  for  wdiich  the  exchange  order 
is  exchanged  shall  be  deemed  to  be  a  ticket  sold  and  issued  at  the 
point  where  the  exchange  order  was  issued.  An  exchange  order  sold 
in  the  United  States  for  through  transportation  to  a  point  in  the 
United  States,  Canada,  or  Mexico  is  held  to  be  subject  to  the  tax 
upon  the  total  amount  of  chaiges  paid,  even  though  the  order  calls 
for  an  exchange  for  another  ticket  in  Canada  or  Mexico.  Where  an 
exchange  order  is  issued  outside  the  United  Stifles,  Canada,  or 
Mexico,  as  part  of  or  in  connection  with  through  transportation,  the 
ticket  for  which  the  exchange  order  is  exchanged  shall  be  deemed  to 
be  a  ticket  sold  and  issued  at  the  point  where  such  exchange  is  made. 

The  tax  applies  to  any  additional  amount  paid  in  the  United  States 
in  connection  with  a  ticket  or  an  exchange  order  issued  in  Canada, 
Mexico,  or  any  other  foreign  country. 

Art.  55.  Steamship  orders. — The  provisions  contained  in  article 
80  as  respects  exchange  orders  and  tickets  issued  in  exchange  there- 
for similarly  apply  to  steamship  orders  and  tickets  issued  in  exchange 
for  steamship  orders. 


TAX  ON  TRAlfTSPOKTATIOX  AND  OTHER  FACILITIES.  23 

Art.  56,  Excess  haggage. — The  8  per  cent  tax  applies  to  the 
amount  paid  for  transporting  baggage  in  excess  of  the  free  alloTv- 
ance,  provided  the  amount  so  paid  exceeds  42  cents. 

Art.  67.  Storage  of  haggage. — The  8  per  cent  tax  applies  to 
amounts  paid  for  storage  of  baggage  transported  in  connection  -with 
the  transportation  of  persons,  provided  the  amount  paid  exceeds 
42  cents. 

Art.  58.  CoTnputation  of  tax. — In  determining  if  the  amount  paid 
for  excess  baggage  or  storage  of  baggage  charges  exceeds  42  cents, 
amounts  so  paid  are  considered  separately  from  amounts  paid  for  the 
transportation  of  the  person. 

Art.  59.  Corpses. — The  amount  paid  for  the  transportation  of  a 
corpse  is  subject  to  the  8  i)er  cent  tax  if  the  corpse  be  transported  on 
a  passenger  ticket  or  an  excess-baggage  check.  If,  however,  a  corpse 
be  transported  by  freight  or  by  express,  the  freight  or  the  express 
tax,  as  the  case  may  be,  applies. 

Art.  60.  Extra  fares  for  special  services  or  facilities. — If  an  extra 
fare  for  special  services  be  charged  in  addition  to  the  transportation 
rate,  the  8  per  cent  tax  applies,  and  shall  be  collected  thereon. 

The  foregoing  provision  applies  to  amounts  paid  for  additional 
passenger  tickets  purchased  or  fares  paid  for  exclusive  occupancy 
of  drawing  rooms,  compartments,  or  sections  in  sleeping  or  parlor 
cars  or  accommodations  furnished  on  steamers. 

Art,  61.  Chartered  cars  or  trains. — A  tax  of  8  per  cent  applies  to 
the  charge  for  a  chartered  or  special  car  or  train,  including  sleeping, 
parlor,  and  private  cars,  for  the  purpose  of  transporting  persons, 
whether  such  charge  be  a  lump  sum  or  on  a  per  capita  basis. 

SERVICES  AND  FACILITIES  NOT  TAXABLE. 

Art.  62.  Cases  in  ivhich  tax  does  not  apply. — The  8  per  cent  tax 
does  not  apply  to  amounts  paid  for  transportation  of  persons  by 
carriers,  as  follows: 

(a)  From  the  last  port  touched  in  the  United  States  to  a  foreigti 
port  other  than  a  Canadian  'or  Mexican  port. 

(h)  From  a  point  in  Canada  or  Mexico  to  a  point  in  the  United 
States. 

(c)  From  a  point  in  Canada  to  another  point  therein,  and  pro- 
vided such  transportation  be  covered  by  tickets  issued  in  Canada  and 
be  a  part  of  through  transportation,  even  though  the  persons  pass 
through  the  United  States  in  course  of  such  transportation. 

(d)  From  a  point  in  Mexico  to  another  point  therein,  and  pro- 
vided such  transportation  be  covered  by  tickets  issued  in  Mexico  and 
be  part  of  through  transportation,  even  though  tlie  persons  pass 
through  the  United  States  in  course  of  such  transportation. 


24  TAX  ON  TRANSPORTATION"   AND  OTHER  FACILITIES. 

(e)  From  a  point  in  Canada  to  a  point  in  Mexico,  or  vice  versa, 
provided  such  transportation  be  covered  by  tickets  issued  in  Canada 
or  Mexico  and  bo  part  of  through  transportation. 

(/)     Where  the  amount  paid  for  transportation  is  42  cents  or  less. 

{g)  In  case  of  connnutation  or  season  tickets  for  trips  less  than 
thirty  (30)  miles. 

(h)  Where  persons  arc  carried  free  under  the  provisions  of  Fed- 
eral or  State  laws. 

TAX  ON  AMOUNTS  PAID  FOR  ACCOMMODATIONS  IN  PARLOR  OR 
SLEEPING  CARS  OR  ON  VESSELS. 

Section  500,  subdivision  (d),  of  the  act  imposes: 

A  tax  equivulent  to  eight  per  centum  of  the  amount  paid  for  seats,  bertlis, 
and  stateroom  in  parlor  cars,  sleeping  cars,  or  on  vessels,  used  in  connection 
with  transportation,  upon  which  tax  is  imposed  by  subdivision  (c). 

Art.  63.  Accommodations  to  'wliich  tax  applies.— The  foregoing 
provision  is  held  to  include  application  to  the  amount  paid  for  each 
drawing-room  or  compartment  in  parlor  or  sleeping  cars  or  on  ves- 
sels and  to  seats  in  observation  or  composite  cars. 

In  case  of  a  chartered  sleeping,  parlor,  or  private  car.  the  total 
amoimt  paid  for  the  haul  and  the  special  accommodations  are.  exclu- 
sive of  meals,  subject  to  an  8  per  cent  tax.  If  separate  charges  are 
made  covering  the  combined  services  and  such  charges  are  paid  to 
different  parties,  such  parties  will  each  be  required  to  collect  and 
return  the  taxes  due. 

The  8  per  cent  tax  applies  to  amounts  paid  for  all  of  the  accop.nno- 
dations  referred  to  above,  for  use  in  connection  with  transportation 
between  points  in  the  United  States  or  from  a  point  in  the  United 
States  to  a  point  in  Canada  or  Mexico,  whether  payment  thereof  be 
made  in  the  United  States  or  elsewhere,  and  even  though  such  trans- 
portation be  part  of  through  transportation  to  or  from  a  foreign 
country,  other  than  Canada  or  Mexico.  The  tax  also  applies  to 
amounts  paid  for  commutation  books  purchased  in  the  United  States 
calling  for  any  of  such  accommodations',  for  use  as  above  stated,  in 
which  event  the  tax  thereon  shall  be  paid  as  and  when  collections  are 
made  of  the  amount  paid  for  such  books.  If  such  commutation 
books,  however,  be  purchased  outside  the  United  States,  the  tax 
applies  to  the  amount  pa,id  for  the  coupons  lifted  therefrom  calling 
for  accommodations  between  or  from  points  in  the  United  States,  as 
in  this  paragraph  first  specified,  and  such  tax  shall  be  collected  as 
flnd  when  such  coupons  are  lifted. 

Where  the  amount  paid  for  transportation  of  persons  includes  ac- 
commodations on  vessels,  the  entire  amount  paid  for  the  transpor- 


TAX   ON   TRANSPORTATION   AND   OTHER  fACILITILS.  25 

tation,  including  such  accommodations,  is  sii1)ject  to  tlie  8  per  cent 
tux. 

Art.  64.  Accommodations  to  wJiicIi  tax  does  not  apply. — The  8  per 
cent  tax  does  not  apply  to — 

{a)  Amounts  paid  for  tickets,  including  commutation  books,,  paid 
for  and  partially  used  before  November  1,  191V. 

(&)  Accommodations  furnished  free  under  the  provisions  of  Fed- 
eral or  State  laws. 

Art.  Go  Duties  of  agents  collecting  cluirges  on  behalf  of  earners 
furnishing  such  accommodations. — Where  an  agent  of  one  carrier  in 
collecting  the  amounts  paid  for  seats,  berths,  or  staterooms  in  parlor 
or  sleeping  cars  or  on  vessels  acts  on  behalf  of  any  or  all  of  the  sev- 
eral carriers  who  are  to  furnish  the  accommodations  involved,  such 
agent  shall  collect  the  taxes  on  the  total  charges  as  and  when  such 
charges  are  collected  and  remit  to  such  other  carriers  the  respective 
amounts,  charges  and  taxes,  collected  on  their  behalf,  and  such  other 
carriers  shall  return  and  pay  such  taxes. 


PART  V. 
TRANSPORTATION  OF  OIL  BY  PIPE  LINE. 

Section  500,  subdivision  (c),  imposes: 

A  tax  equivalent  to  eight  per  centum  of  tlie  amount  paid  for  the  transporta- 
tion on  or  after  such  date  of  oil  by  pipe  line. 

Akticle  6G.  Definition  of  oil. — The  word  "  oil,"  as  used  in  the  fore- 
going subdivision,  is  held  to  mean  crude  petroleum  and  such  of  its 
products  as  may  be  transported  by  pipe  line. 

Article  67.  Miscellaneous  provisions. — Section  501,  subdivision 
(d),  provides  that  the  tax  imposed  by  subdivision  (e)  of  section  500 
shall  apply  to  all  transportation  of  oil  by  pipe  line.  In  case  no  charge 
for  transportation  is  made,  by  reason  of  ownership  of  the  commodity 
transported,  or  for  any  other  reason,  the  person  transporting  by  pipe 
line  shall  pay  a  tax  equivalent  to  the  tax  which  would  be  imposed  if 
such  person  received  payment  for  such  transportation,  and  if  the 
tax  can  not  be  computed  from  actual  bona  fide  rates  or  tariffs  it  shall 
be  computed  (1)  on  the  basis  of  the  rates  or  tariffs  of  other  pipe 
lines  for  like  services,  as  determined  by  the  Commissioner,  or  (2)  if 
no  such  rates  or  tariffs  exist,  on  the  basis  of  a  reasonable  charge  for 
such  transportation,  as  determined  by  the  Commissioner. 

Amounts  paid  for  transportation  of  oil  by  pipe  line  commencing 
prior  to  April  1,  1919,  although  the  transportation  does  not  end  until 
after  that  date,  are  subject  to  the  tax  imposed  by  the  Revenue  Act  of 
1917.  Such  amounts  paid  for  the  transportation  of  oil  by  pipe  line 
are  subject  to  the  tax  imposed  by  the  Revenue  Act  of  1918  only  when, 
the  transportation  commences  on  or  after  April  1,  1919.  The  date 
when  such  amounts  are  paid  for  such  transportation  does  not  affect 
the  question  as  to  which  rate  of  tax  applies. 

Reference  should  be  had  to  Parts  I  and  II,  the  provisions  whereof, 
in  so  far  as  they  are  applicable  to  transportation  of  oil  by  pipe  line, 
are  held  to  control  in  connection  with  the  application  of  the  tax  im- 
posed undsr  subdivision  (e)  of  section  500  of  the  act. 
26 


PAET  VI. 
EXEMPTIONS. 

GOVERNMENTAL  EXEMPTION. 

Section  500,  subdivision  (h) ,  of  the  act  provides : 

No  tax  shall  be  imposed  under  this  section  upon  any  payment  received  for 
services  rendered  to  the  United  States  or  to  any  State  or  Territory  or  the 
District  of  Columbia.  The  right  to  exemption  under  this  subdivision  shall  be 
evidenced  in  such  manner  as  the  commissioner,  -with  the  approval  of  the  Sec- 
retary, may  by  regulation  prescribe. 

Art,  68.  Nature  of  exemqHion. — The  words  "  State  "  and  "  Terri- 
tory "  include  political  subdivisions  thereof,  such  as  counties,  cities, 
towns,  and  other  municipalities.  The  exemption,  however,  is  to  be 
secured  only  upon  the  jDroduction  of  such  evidence  of  right  to  exemp- 
tion as  is  called  for  by  these  regulations. 

Aet.  69.  Foreign  governments. — Amounts  paid  by  foreign  govern- 
ments for  transportation  and  transmission  services  are  subject  to  the 
taxes  imposed  under  section  500. 

Art,  70.  Government  agencies. — Transportation  services  rendered 
to  agencies  of  the  United  States  are  exempt  from  the  tax.  Such 
agencies  include  the  American  National  Eed  Cross,  United  States 
Shipping  Board  Emergency  Fleet  Corporation,  United  States  Food 
Administration  Grain  Corporation,  United  States  Fuel  Administra- 
tion, United  States  Housing  Corporation,  Commission  on  Training 
Gamp  Activities,  War  Savings  Committee,  Liberty  Loan  Commit- 
tee, War  Industries  Board,  Federal  Farm  Appi^isers,  Federal  land 
banks.  Federal  reserve  banks,  Panama  Eailroad  Co.,  and  similar 
agencies  supported  bj^  Government  funds. 

(a)  EXEMPTION— PROPERTY. 

Art.  71.  Evidences  of  right  to  exemjytion. — The  right  to  exemp- 
tion under  section  500  from  the  tax  on  amounts  paid  for  the  transpor- 
tation of  propert}'  shall  be  evidenced  in  one  of  the  following  ways : 

{a)  Payment  of  such  amounts  directly  to  the  carrier  by  the  GoV^' 
ernment  to  which  the  services  are  rendered. 

27 


28  TAX  ox  TEAXSPOETATIOIT  AND  OTHER  FACILITIES. 

(h)  A  standard  form  of  exemption  certificate  for  use  of  the  Federal 
Government,  substantially  in  form  following: 

EXEMrTION  CERTIFICATE. 

^  TAX   ON   TEANSrOKTATION   OF  ntOPEKTY. 

h 

*  TREASimV    DErARTMBNT. 

g  Office  Comaiissionku  oi-  Inteknal  Revexue. 

a  l<'orm  750. 

a  Date 


ej   Place  of  payment  of  charges 

g  Name  of  carrier  collecting  chargcs- 


S  I  certify  that  the  transportation  charges  on  the  property  described  in  the  waybill, 

%j  bill  of  lading,  freight  bill,  or  express  receipt,  dated ,  covering 

o 

t;  a  shipment  carried  from to , 

fi 

■^    in    car    Initial    and    No.    or    vessel    named 

tn 

o    to   which   this   exemption   certificate   is  attached, 

.5  have  been  or  will  be  paid  by  the  United  States,  and  that  the  transportation  charges 

p    thereon,  amounting  to  ? ,  are  exempt  under  section  500  of  the 

rt  revenue  act  of  1918  from  the  tax  Imposed  by  said  act. 

o  (Signature  of  Government  officer  or  employee.) 

(3j 


p  (Federal  department  or  establishment.) 


c3 


(Title.) 


■s   penalty  fok  feauddlent  use,  $1j000  and  imprisonment. 

o 

a       Note. — Transportation  agents   should    not  accept  this   certificate  unless  satisfied, 

£   through    the    production   of   proper   credentials   or   otherwise,    that   the   person  wh» 

fi   signed  it  is  an  ofiicer  or  employee  of  the  Federal  Government. 

A  separate  exemption  certificate  will  be  required  for  each  shipment. 
^       A  blanliet  certificate  covering  two  or  more  shipments  or  a  given  period  will  not 
cj  be  accepted  as  evidence  of  right  to  exemption. 
xa        This   certificate   should   not    be   issued    to    secure   exemption   upon    transportation 

charges  in   the  case  of  "  lump-sum  "   contracts,   or  when   the   material   transported 

Is  sold  to  the  Government  at  a  delivered  price. 

(c)  A  form  of  exemption  certificate,  substantially  in  accord  with 
the  preceding  form,  for  use  by  any  of  the  States  or  Alaska  or  Hawaii, 
or  any  political  subdivision  thereof,  or  the  District  of  Columbia, 
showing  the  political  subdivision  by  which  the  charges  have  been  or 
will  be  paid. 

(b)  EXEMPTION— PERSONS. 

Art.  72.  Evidences  of  right  to  exemption. — The  right  to  exemption 
under  section  500  from  the  tax  on  amounts  paid  for  the  transporta- 
tion of  persons  shall  be  evidenced  in  one  of  the  following  ways : 

{a)  A  standard  form  of  transportation  request  as  prescribed  and 
used  by  the  Federal  and  State  Governments. 


TAX   ON   TRANSPORTATION   AND  OTHER  FACILITIES. 


29 


(h)   A  standard  form  of  exemption  certificate  for  use  of  officers  or 
employees  of  the  Federal  Government,  substantially-  in  form  fol- 


lowing : 


0) 

.a 


01  .S 

no 


o  o 
rt  M 


o 
a  60 

-I 

■-pS 

ID 


B 


o© 

i»  o 

a 

ej 
EH 


Fouii  731. 
U.  S.  Internal  Revenue. 

EXEMPTION  CERTIFICATE. 

TAX  OX  THE  TBANSPOBTATION  OF  PERSONS. 

Place  of  issue  of  ticket Date 

Name  of  carrier 


Number. 

Indicate  by  X. 

Service  (indicate  amount  paid  in  proper  space). 

Ticket. 

Form. 

Rail. 

Water. 

Transpor- 
tation. 

Seat. 

Berth. 

State- 
room. 

Excess 
baggage. 

$ 

$ 

$ 

$ 

$ 

From- 
To  _— 


Via- 


(Givc  name  or  names  of  transportation  company.) 

I  certify  that  the  charges  for  the  services  indicated  above  have  been,  or  will  be, 
paid  for  by  the  United  States,  are  incurred  In  the  performance  of  my  official  duties, 
and  arc  exempt  under  section  500  of  the  revenue  act,  1918,  from  the  tax  imposed  by 
said  act. 


(Federal  Department  or  establishment.) 


(Signature  of  Govt,  officer  or  employee.) 


PEXATV   FOR   FRAL'DITLENT  USB, 

$1,000  and  imprisonment. 


(Official  title.) 


[REVERSE  SIDE.] 

Note. — A  separate  exemption  certificate  will  be  required  for  each  ticket  furnished,  fare 
collectfHl,  or  service  rendered,  except  that  officers  or  employees  representing  the  interests 
exempt,  when  conducting  prisoners  or  other  persons  vyhose  transportation  costs  are  paid 
by  such  interests,  may  give  one  certificate  to  cover  the  party. 

1.  A  form  of  exemption  certificate,  substantially  in  accord  with  this  form,  should  be 
provided  by  the  States,  the  Territories  of  Alaska  and  Hawaii,  and  the  District  of  Colum- 
bia, or  the  political  subdivisions  thereof,  for  the  use  of  officials  and  employees.  Such 
certificates  will  not  be  furnished  by  the  Internal  Revenue  Bureau. 

■2.  W^here  the  person  transported  is  incurring  the  charge  in  the  performance  of  hi."? 
official  duties  as  an  officer  in  the  Army  or  Navy,  a  standard  form  of  exemption  certificate 
for  such  use  should  be  provided  as  follows  : 

EXEMPTION   CEKTIFICATE. 

. ,   19 

I  certify  that  ticket  No. ,  for  transportation  from 

to ,    via    

is  on  account  of  official  business  and  not  for  private  purposes,  and  is  exempt  from  the  tax 
imposed  by  the  Revenue  Act  of  1918. 

(Name  of  officer.) 

^("Rank.") 

Note. — Forms  1  and  2  should  be  on  the         

same  size  paper  as  this  form.  (Branch  of  service.) 

(c)  A  form  of  exemption  certificate,  substantially  in  accord  with 
the  preceding  form,  for  use  by  any  of  the  States  or  Alaska  or  Hawaii, 
or  any  political  subdivision  thereof,  or  the  District  of  Columbia, 


so  TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES. 

sho'wing  tlio  political  subdivision  by  :svhich  the  charges  have  been, 
or  Avill  be,  paid. 

(d)  AVhere  the  person  transported  is  incurring  the  charge  in  the 
performance  of  his  official  duties  as  an  officer  in  the  Army  or  Navy, 
a  standard  form  of  exemption  certificate  for  such  use  as  follows: 

EXEMPTION    CERTIFICATE. 

,    19—. 

I  certify  tliat  ticket  No. for  transportation  from 


to   ,   via   ,  is  on   account  of  official 

business  and  not  for  private  pun^oses  and  is  exempt  from  tlie  tax  imposed  by 
section  500  of  the  revenue  act  of  191S. 


(Rank.) 


(Army  or  Navy.) 

An  appropriate  form  of  e:^^emption  certificate  must  be  delivered  to 
the  conductor  of  the  train  upon  which  an  officer  or  employee  of  the 
United  States,  or  of  any  State,  or  Alaska  or  Hawaii,  or  any  political 
subdivision  thereof,  or  of  the  District  of  Columbia,  is  traveling  upon 
official  business,  using  a  mileage  book  not  marked  exempt  from  tax, 
and  upon  which  the  tax  has  not  been  paid,  each  time  mileage  coupons 
are  lifted;  otherwise  the  tax  must  be  collected  on  the  sale  value  of 
the  coupons  lifted. 

Art.  73.  Anibassadors^  ministers,  and  diplomatic  representa- 
tives.— Ambassadors,  ministers,  and  properly  accredited  diplomatic 
.  representatives  of  any  foreign  government  to  the  United  States  are 
exempt  from  the  payment  of  taxes  on  amounts  paid  for  transporta- 
tion services  rendered  them  within  the  United  States. 

The  following  form  may  be  used  to  secure  exemptions  when  signed 
by  an  ambassador,  minister,  or  any  properly  accredited  diplomatic 
representative  of  a  foreign  government : 

FOEM  No. « 

19__. 

I  certify  tliat  ticket  No. for  transportation  from 

, to via .^^ Is  far  use  of 

»_ ,  attached  to  my ,  and  is  exempt  from  tax. 


(Title.) 


TAX  ON  TBANSPORTATION  AND  OTHER  FACILITIES.  81 

(c)  EXEMPTION  PROVISIONS— COST-PLUS  CONTRACTS. 

Art.  74.  Cost-plus  contracts. — Amounts  paid  for  the  transporta- 
tion of  freight  or  persons,  which  are  finally  paid  by  the  Government 
under  cost-plus  contracts,  are  exempt  from  the  taxes  imposed  by  sec- 
tion 500  of  the  act. 

(1)  Where  a  contractor  does  work  for  the  Government,  the  con- 
tract price  of  which  is  the  cost  plus  a  certain  percentage,  the  amount 
received  by  a  carrier  for  the  transportation  of  property  used  or  to 
be  used  by  the  contractor  in  the  Government  work  falls  within  the 
exemption  from  the  transportation  tax  as  provided  by  section  500. 

In  any  such  case,  as  in  other  cases  of  exemption,  the  proscribed 
certificate  of  exemption  (Form  T50)  must  be  used  and  must  be 
signed  b}^  a  Government  officer  or  emploj-ee.  A  certificate  signed  by 
the  contractor  does  not  furnish  the  required  evidence  of  exemption. 

(2)  Exemption  may  be  claimed  on  amounts  paid  for  the  trans- 
portation of  persons  employed  by  a  contractor  working  for  the  Gov- 
ernment under  a  cost-plus  contract  where  the  transportation  charge 
of  the  employee  is  an  item  in  the  cost  of  the  work  and  hence  will 
be  finally  paid  by  the  Government. 

In  such  case  the  right  to  exemption  from  the  tax  on  the  amount 
paid  for  transportation  of  such  employee  shall  be  evidenced  by  an 
exemption  certificate  signed  by  a  governmental  officer  or  employee, 
substantially  in  the  following  form: 

EXEMPTION    CESTIFICATE. 

,  19—. 

I  certify  that  ticket  No. ,  for  transportation  from 

to    .    via    ,    is    for    use    of    an    employee    of 

,  and  is  to  be  paid  for  by  the  United  States  Government. 

(Name  of  contractor.) 


(Signature  of  governmental  officer  or 
employee.) 


(TiUe.) 
Place  of  is.sue 

Name  of  carrier 

GENERAL   EXEMPTION   PROVISIONS— PROPERTY   AND   PERSONS. 

Art.  75.  Oredentials. — The  credentials  referred  to  on  the  margin' 
of  the  exemption  certificates  are  such  papers,  documents,  or  other 
evidences  as  will  reasonably  assure  the  officer,  agent,  or  other  em- 


32  TAX   ON  TRANSPORTATIOX  AND  OTHER  FACILITIES. 

ployco  collecting  tho  transportation  charge  that  the  officer  or  em- 
ployee issuing  such  certificate  is  an  officer  or  employee  of  the  Govern- 
ment on  whose  behalf  the  certificate  is  issued. 

Art.  7G.  Forms  to  he  furnished. — Exemption  certificates,  Forms 
731  and  750,  will,  on  request,  be  furnished  by  the  Treasury  Depart- 
ment to  officers  and  emplo3'ces  of  the  Federal  Government  entitled 
thereto.  A  State,  Territory,  or  political  subdivision  thereof,  or  the 
District  of  Columbia,  will  be  required  to  furnish  its  own  blanks  for 
claiming  exemption  from  the  tax. 

Art.  77.  Lump-sum  Government  contracts. — Where  a  contractor 
does  work  for  the  Government,  the  contract  price  of  which  is  a  lump 
sum,  the  ex&mption  does  not  apply  to  amounts  paid  for  transporta- 
iton  of  property  used  or  to  be  used  by  the  conti:actor  in  connection 
with  the  work. 

Art.  78.  Exemption — Parsons. — Exemption  may  be  claimed  in  the 
case  of  persons  only  where  the  person  transported  is  incurring  the 
charge  in  performance  of  his  official  duties  as  an  officer  or  employee 
of  the  United  States  or  of  a  State  or  Territory,  or  any  political  sub- 
division thereof,  or  of  the  District  of  Columbia.  Thus,  transporta- 
tion charges  paid  by  soldiers  traveling  on  furlough  at  their  own  ex- 
pense are  not  exempt.  The  fact  that  the  amount  of  mileage  or  other 
allowance  paid  or  made  by  the  Government  for  transportation  of  an 
officer  or  employee  in  the  performance  of  his  official  duties  may  be 
more  than  sufficient  to  reimburse  him  for  the  transportation  payment 
does  not  prevent  the  application  of  the  exemjption  provision  to  such 
payment. 

The  exemption  provided  for  applies  to  amounts  paid  as  fares  and 
to  amounts  paid  for  accommodations  in  parlor  or  sleeping  cars  or 
on  vessels  in  connection  with  transportation  upon  which  tax  is  im- 
posed by  subdivision  (c),  section  500. 

Art.  79.  Certificate  required  when  charges  paid. — An  exemption 
certificate  for  property  or  persons  or  other  evidence  of  right  to  ex- 
emption, must  be  delivered  to  the  carrier  by  the  person  paying  the 
charges  when  the  charges  are  paid;  otherwise  there  shall  be  no  ex- 
emption from  the  tax. 

Art.  80.  Prepaid  charges. — Where  transportation  charges,  either 
prepaid  or  collect,  are  paid  by  the  shipper  at  origin  of  the  shipment, 
or  by  a  contractor  at  destination  of  the  shipment,  upon  property 
shipped  to  the  United  States  Government  or  to  a  State  or  Territory 
or  the  District  of  Columbia,  or  to  a  Government  contractor,  and  the 
payment  of  such  charges  is  in  behalf  of  the  Government,  and  the 
amount  paid  therefor  is  borne  by  the  Government,  such  amounts  are 
not  subject  to  the  tax.  Exemption  certificates  properly  signed  by  a 
governmental  officer  or  employee  must  be  furnished  to  the  carrier 
as  evidence  of  such  rights  to  exemption. 


TAX  ON  TRANSPORTATION  AND  OTHER  FACILITIES.  33 

Art.  81.  Indorsement  of  certificates. — An  exemption  certificate 
signed  by  a  contractor  or  any  person  acting  temporarily  as  an  agent 
of  the  Government  in  prepaying  transportation  charges  does  not  fur- 
nish the  required  evidence  of  exemption.  All  exemption  certificates 
must  be  signed  by  a  governmental  officer  or  employee. 

Art.  82.  Seimrate  certificaies. — Exemption  certificates  must  be  fur- 
nished with  each  consignment.  An  exemption  certificate  covering  a 
number  of  consignments  will  not  be  accepted  by  a  carrier. 

Art.  83.  Carriers  to  record  and  file  certifi.cates. — Carriers  shall,  in 
accepting  exemption  certificates  and  transportation  requests,  see  that 
they  are  duly  filled  out.  In  accepting  any  evidence  of  right  to  ex- 
emption, carriers  shall  note  on  their  records,  opposite  the  entry  of 
the  collection,  reference  to  such  evidence;  they  must  file  and  retain  in 
the  offices  or  places  where  such  collections  are  made,  or  where  records 
of  such  collections  are  kept,  all  such  exemption  certificates  honored 
by  them.  All  evidences,  and  all  records  of  collections  of  taxes  and 
of  charges  for  transportation,  shall  be  subject  to  inspection  by  ac- 
credited representatives  of  the  Commissioner  of  Internal  Revenue. 


PART  VII. 

PAYMENT,  COLLECTIONS,  AND  RETURNS  PENALTIES. 

PAYMENT,  COLLECTION,  REPORTING,  RETURNING,  AND  REMIT- 
TANCE OF  THE  TAXES— PENALTIES. 

Section  501,  subdivision  (a),  of  the  act  provides: 

That  the  taxes  imposed  by  section  500  shall  be  paid  by  the  person  paying  for 
the  services   or   facilities   i-endered. 

Section  502  of  the  act  provides: 

That  each  person  receiving  any  payments  referred  to  in  section  500  shall 
collect  the  amount  of  the  tax,  if  any,  imposed  by  such  section  from  the  person 
making  such  payments,  and  shall  make  monthly  returns  under  oath,  in  dupli- 
cate, and  pay  the  taxes  so  collected  and  the  taxes  Imposed  upon  it  under  sub- 
division (c)  or  (d)  of  section  501  to  the  collector  of  the  district  in  which  the 
principal  office  or  place  of  business  is  located.     *     *     * 

The  returns  required  under  this  section  shall  contain  such  information  and  be 
made  at  such  times  and  in  such  manner  as  the  Commissioner,  with  the  approval 
of  the  Secretary,  may  by  regulation  prescribe. 

Art.  84.  Payment  of  taxes. — All  taxes  imposed  by  section  500 
shall  be  paid  by  the  person  from  whom  or  from  which  the  carrier 
collects  the  charges  for  the  services  or  facilities  rendered. 

Art.  85.  Collection  of  taxes. — All  such  taxes  shall,  as  and  when 
the  charges  are  collected,  be  paid  to  and  collected  by  the  officers, 
agents,  or  other  employees  of  the  carrier,  who  collect  such  charges. 

Art.  8G.  Credit  arrangements. — When  transportation  services  are 
rendered  by  any  carrier  as  described  in  these  regulations  and  credit 
is  extended  by  such  carrier  to  the  person  to  whom  such  services  have 
been  rendered,  the  tax  becomes  due  by  the  carrier  to  the  Government 
and  such  credit  is  extended  at  the  carrier's  risk.  In  the  event  of  a 
failure  to  collect  the  amounts  due,  the  carrier  is  liable  for  the  tax 
which  should  have  been  collected  upon  the  amount  due  for  the  trans- 
portation charges. 

Art.  87.  Records — Taxes  collected. — Eecords  of  carriers,  at  their 
respective  agencies  at  which  the  tax  is  collected,  shall  be  so  kept  as 
to  show  the  application  of  the  tax  to  each  shipment  of  property, 
ticket  sold,  fare  collected,  or  other  individual  transaction. 

Art.  88.  Records — No  taxes  collected. — Should  any  payment  for 
services  or  facilities  of  carriers  be  exempt,  under  the  provisions  of 
84 


TAX  ON  TEANSPORTATION  AND  OTHER  FACILITIES.  35 

Title  V,  from  the  tax,  or  should  the  tax  thereon  be  collectible  under 
the  terms  of  these  regulations  by  any  carrier  other  than  the  carrier 
furnishing  the  services  or  facilities,  notation  shall  be  made  on  the 
records  of  the  carrier  furnishing  the  services  or  facilities  indicating 
the  reason  for  not  collecting  the  tax. 

Art.  89.  Records — Adjustment  of  taxes. — Since,  in  the  ordinary 
course  of  transportation,  overcharges  and  undercharges  will  occur, 
officers,  agents,  and  other  employees  of  carriers  are  authorized,  in 
adjusting  such  overcharges  and  undercharges,  to  adjust  the  taxes 
accordingly.  All  redemptions  or  other  adjustments  made  in  connec- 
tion with  passenger  transportation,  whether  by  way  of  refund  on 
mileage-book  covers  or  otherwise,  are  to  be  treated  as  adjustments  of 
overcharges  or  undercharges,  as  the  case  may  be.  Nothing  in  these 
regulations,  however,  authorizes  an  adjustment  of  a  tax  by  a  carrier 
in  any  instance  where,  after  collection  of  a  charge  and  tax,  it  is 
claimed  that  the  charge  is  entitled  to  exemption  from  the  tax  by 
reason  of  exportation,  governmental  use,  or  otherwise.  All  adjust- 
ments of  taxes  must  be  recorded.  They  must  be  supported  by  such 
evidences  as  will  fully  substantiate  the  correctness  thereof,  and  such 
evidences  must  be  kept  in  the  respective  offices  through  which  such 
adjustments  are  made. 

Any  person  making  a  refund  of  any  payment  upon  which  tax  is 
collected  under  this  section  may  repay  therewith  the  amount  of  the 
tax  collected  on  such  payment;  and  the  amount  so  repaid  may  be 
credited  against  the  amount  included  in  any  subsequent  monthly 
return. 

Art.  90.  Records — Summaries  of  transactions. — Officers,  agents, 
and  other  employees  of  carriers  shall  cause  to  be  assembled,  for  each 
calendar  month,  at  the  general  office  or  offices  of  such  carriers,  sum- 
maries, by  the  several  classes  of  the  taxes  specified  in  Form  727,  re- 
vised, showing  the  aggregate  taxes  collected  by  their  respective  offi- 
cers, agents,  or  other  employees.  There  shall  likewise  be  so  assembled 
summaries  of  all  tax  adjustments.  Such  summaries  shall  show  {a) 
the  aggregate  taxes  of  each  class  collected,  as  called  for  by  Form  727, 
revised;  and  (&)  the  total  amount  deducted  for  adjustment  of  taxes 
of  each  class  on  account  of  overcharges,  as  called  for  by  Form  727, 
revised. 

The  difference  between  the  two  items,  {a)  and  (&),  shall  be  the 
amount  to  be  reported  to  the  proper  collector  in  the  manner  pre- 
scribed by  form  727,  revised. 

Art.  91.  Return  and  vemittance  of  taxes. — Returns  must  be  made 
on  or  before  the  last  day  of  each  month,  covering  taxes  collected  or 
paid  during  the  preceding  month.  Returns  will  be  made  on  Form 
727,  revised,  under  oath,  in  duplicate,  and  filed  with  the  collector  of 


30  TAX  ON  TEANSPORTATIOiT  AND  OTHEK  FACILITIES. 

the  district  in  which  the  principal  office,  or  place  of  business,  of  the 
carrier  is  located. 

The  tax  is  due  and  pa3'able  to  the  collector  at  the  time  fixed  for 
filing  the  return.  AMicre  it  is  found  to  be  impossible  to  make  the 
proper  return  within  the  prescribed  time,  request  may  be  filed  with 
the  collector  for  an  extension  of  time,  and  upon  a  proper  showing  the 
collector  is  authorized  to  fix  a  definite  time  in  each  instance  within 
which  the  return  may  be  filed,  such  extension  of  time  not  to  exceed 
sixty  (CO)  days. 

If  the  amount  of  tax  covered  by  any  return  required  to  be  filed 
under  section  502  is  not  in  excess  of  $10,  the  return  may  be  signed 
or  acknowledged  before  two  witnesses  instead  of  under  oath. 

Art.  92.  Penalties — 

(1)  Section  502  of  the  act  specifically  provides  that  the  taxes 
under  section  500  shall  (without  assessment  by  the  Commissioner  or 
notice  from  the  collector)  be  due  at  the  time  fixed  for  filing  this 
return,  and  if  the  tax  is  not  paid  at  such  time  there  shall  be  added 
as  part  of  the  tax  a  penalty  of  5  per  cent,  together  with  interest  at 
the  rate  of  1  per  cent  for  each  full  month  from  the  time  when  the 
tax  becomes  due. 

(2)  Sec.  130S.  («)  That  any  person  required  under  Titles  V,  *  *  *  (whicli 
Includes  sections  500,  501,  and  502)  *  *  *  to  pay,  or  to  collect,  account  for, 
and  pay  over  any  tax,  or  required  by  law  or  regulations  made  under  authority 
thereof  to  make  a  return  or  supply  any  information  for  the  purposes  of  the 
computation,  assessment,  or  collection  of  any  such  tax,  who  fails  to  pay,  collect, 
or  truly  account  for  and  pay  over  any  such  tax,  make  any  such  return,  or  supply 
any  such  information  at  the  time  or  times  required  by  law  or  regulation  shall. 
In  addition  to  other  penalties  provided  by  law,  be  subject  to  a  penalty  of  not 
more  than  $1,000. 

(b)  Any  person  who  willfully  refuses  to  pay,  collect,  or  truly  account  for 
and  pay  over  any  such  tax,  make  such  return,  or  supply  such  Information  at 
the  time  or  times  required  by  law  or  regulation,  or  who  willfully  attempts  in 
any  manner  to  evade  such  tax,  shall  be  guilty  of  a  misdemeanor,  and  in  addi- 
tion to  other  penalties  provided  by  law  shall  be  fined  not  more  than  $10,000  or 
Imprisoned  for  not  more  than  one  year,  or  both,  together  with  the  costs  of 
prosecution. 

(c)  Any  person  who  willfully  refuses  to  pay,  collect,  or  truly  account  for  and 
pay  over  any  such  tax  shall,  in  addition  to  other  penalties  provided  by  law,  be 
liable  to  a  penalty  of  the  amount  of  the  tax  evaded,  or  not  paid,  collected,  or 
accounted  for  and  paid  over,  to  be  assessed  and  collected  in  the  same  manner 
as  taxes  are  assessed  and  collected :  Provided,  lioicevcr,  That  no  penalty  shall 
be  assessed  under  this  subdivision  for  any  offense  for  which  a  penalty  may 
be  assessed  under  authority  of  section  317G  of  the  Revised  Statutes  as 
amended     *     *     *. 

(d)  The  term  "person"  as  used  in  this  section  includes  an  officer  or  em- 
ployee of  a  corporation  or  a  member  or  employee  of  a  partnership  who,  as  such 
officer,  employee,  or  member,  is  under  a  duty  to  perform  the  act  in  respect  of 
which  the  violati^'u  occurs. 


TAX  ON  TEAJSrSPORTATION   AND  OTHER  FACILITIES.  37" 

(3)  Section  3176  of  the  Revised  Statutes,  as  amended,  provides 
that  in  case  of  any  faihire  to  make  and  file  a  return  within  the  pre- 
scribed time  there  shall  be  added  to  the  tax  25  per  cent  of  its  amount. 

(4)  Section  3176  of  the  Revised  Statutes,  as  amended,  further 
provides  that  in  case  a  false  or  fraudulent  return  is  willfully  made 
there  shall  be  added  to  the  tax  50  per  cent  of  its  amount. 

Daniel  C.  Roper, 
Commissioner  of  Intertml  Revenue. 

Approved  May  1,  1919 : 

J.    H.    MOYLE, 

Acting  Secretary  of  the  Treasury. 


INDEX. 

[References  are  to  articles.] 


Art. 

Accommodations  for  passengers,  free 64 

Accounting  for  taxes,  duty 91 

Additional  tickets,  for  exclusive  occupancy  of  sleeping  or  parlor  compart- 
ments or  sections GO 

Adjustment  of  overcharges  and  undercharges 89 

Adjustment : 

Of  tax,  records 89 

Of  tax,  summaries 90 

Agencies  supported  by  Government  funds,  exempt 70,  78 

Agents : 

Duty  of,  relative  to  collection  of  tax  on  special  accommodations 65,  78 

To  indorse  mileage  book  sold  prior  to  November  1,  1917 48 

To  indorse  ticket  sold  prior  to  November  1,  1917 45 

Transportation  of  property  of 21,  22 

Selling  prepaid  orders,  collection  of  tax 53 

Alaska,  part  of  United  States 3 

Ambassadors  of  foreign  countries,  exempt 73,  78 

Army  officers,  exempt 72,  78 

Associations,  inclusion  in  "  person  " 3 

Baggage : 

Excess 56.58 

Storage  of 57,  58 

Transportation  of,  not  express  business 37 

Sale  of  unclaimed 32 

Basis  of  computation  of  tax  where  no  charge  collected 22 

Berths : 

In  sleeping  car G3,  78 

On  vessels 63,  78 

Bill  of  lading: 

Domestic,  exemption  of  charges  on  property  exported  under 15 

Foreign,  collection  of  tax  on  charges  on  property  imported  under 17, 18 

Through,  collection  of  tax  on  charges  on  property  imported  under 17. 18 

Through  export,  exemption  of  charges  on  property  exported  under 15 

Blocking  property  in  cars,  charges  for 31 

Boats,  chartered 33 

Book  form,  tickets  for  transportation  of  commodities 28 

British  Admiralty,  as  consignee 15 

Bulk,  tickets  for  transportation  of  commodities  in 28 

Canada : 

Cash  fares  to  points  in 51 

Exchange  orders  issued  in 54 

Mileage  book  purchased  in 48,  50 

Through  bill  of  lading  to,  exemption  of  charges  under 15 

89 


40  INDEX. 

Canada — Continued.  _A^rt. 

Transportation  of  persons  between  points  in G2 

Transportation  of  persons  from,  to  Mexico 62 

Transportation  of  persons  from,  to  United  States G2 

Transportation  of  persons  to 38 

Transportation  of  property  exported  to 15 

Canal  Zone,  shipment  to,  not  export 16 

Cargo,  trimming  of,  in  vessels — transportation 2 

Carrier : 

Collecting  charges  collects  tax 12 

Collecting  charges  on  behalf  of  other  carriers 12 

Defaiition 1 

Liable  in  the  event  of  failure  to  collect  tax  from  person  served 86 

Materials  and  supplies  of,  transportation  of 23,  25 

Motor    power 35,  37 

I'aynients  by,  for  towase,  not  taxable 11 

Payments  to,  by  express  companies,  not  taxable 10 

Services  rendered  on  behalf  of,  transportation 2 

To  assemble  summaries  of  records  monthly 90 

To  collect  tax 85 

To  record  adjustments . 89,  90 

To  record  and  file  certificates  of  exemption 83 

To  record  exempt  transportation 88 

To  record  taxes  collected 87,  90 

Transporting  own  property 21,  22,  23,  33 

Cartage  of  property  transported  not  transportation 2 

Cash  and  tickets  combined 43 

Cash  fares,  tax  on 51 

Certificate : 

Exemption,  credentials  to 75 

Forms  furnished 76 

Indorsement  of 81 

Governmental,   of  persons 72,  76,  79,  SO 

Governmental,  of  property 71,  76,  79,  80 

Must  be  separate  with  each  consignment 82 

To  be  recorded  and  filed 83 

When  delivered  to  carrier 79 

Charges : 

Blocking  and  staking  property  in  cars 31 

In-transit    privileges 13 

No  tax  where 21,22,36 

On  imported  property 17, 18 

Property  shipped  for  export 15 

Road  and  water  fall,  taxable 9, 10 

Shipment  passing  through  foreign  country 20 

State  inspection 29 

Storage 80 

Taxable,  general  rule 4 

Terminal   service 14 

Water  service 14 

Chartered  trains  or  cars  for  passengers 61,  63 

Chartered    boats 33 

Circus  trains,  transportation  of  property  and  persons 27 


INDEX.  41 

Art, 

Cities,  inchided  in  "  State  "  or  "  Territory  " 68 

Collection  of  tax : 

By  carrier  collecting  charges 12,  34 

By  whom 85 

On  charges  for  in-transit  privileges 13 

On  charges  for  prepaid  ordei's 53 

On  charges  on  imported  property 17, 18 

On  charges  on  property  for  export 15 

On  charges  for  special  accommodations  for  passengers 65,78 

On  terminal  or  water-service  charges 14 

Collector,  means  collector  of  internal   revenue 3 

Combined  freight  and  express  services 34 

Combined  tickets  or  cash  and.  tickets 43 

Commissioner,  means  Commissioner  of  Internal  Revenue 3 

Commodities : 

Necessary  to  business  of  carrier,  transportation  of 23,25,36 

Transportation  of 28 

Commutation  tickets 41 

Purchased  prior  to  November  1,  1917 44,  45,  46 

Trips  less  than  30  miles 41 

Compartments  in  sleeping  or  parlor  cars,  exclusive  occupancy  of 60 

Competition,  when  exists 35 

Computation  of  tax  on  transportation  without  charge 22 

Continuous  transportation,  combination  fares 43 

Zone  system 42 

Contracts,  Government : 

Cost-plus,  transportation  under 74 

Lump  sum,  transportation  under 77 

Corporations,  inclusion  in  "  person  " 3 

Corpses 59 

Cost-plus  contracts.  Government,  freight  or  persons  transported  under 74 

Counties,  included  in  "  State  "  or  "  Territory  " 68 

Credentials  to  exemption  certificate 75 

Credit  arrangements  by  carrier  with  person  served 8G 

Crude  petroleum,  transportation  by  pipe  line 66 

Date,  effective,  of  law 1 6,  7 

Date  of  transportation  determines  taxability 6,  7 

Dead  bodies,  transportation  of 59 

Definition : 

Carrier 1 

Oil    66 

Territory 68 

State 68 

Person   3 

Regular  established  line 39 

Transportation 2 

United  States 3 

Delivery  of  property  transported — transportation 2 

Diplomatic  representatives  of  foreign  governments,  exempt 73,78 

Demurrage  on  properly  transj)orted,  transportation 2 

Director  of  overseas  transportation,  as  consignee 15 


42  INDEX. 

District  of  Columbia  :  Art. 

Exemption  of  charges  on  offices  and  employees 72 

Included  in  United  States 3 

Domestic  bill  of  lading,  exemption  of  i)ropcrty  exported  under 15 

Domestic  sbipment  passing  through  foreign  country 20 

Drawing-rooms : 

In  sleeping  cars  or  on  vessels 63-65 

Exclusive  occupancy  of 60 

Governmental  exemptions 78 

Duplication  of  tax,  no 10 

Effective  date  of  law 6,7 

Eight  per  cent  tax  : 

Application,  iu  general 38 

Cash   fares 51 

Charge  on  chartered  car  or  train 61 

Circus  trains 27 

Excess  baggage 56,  58 

Mileage-exchange  ticket 48 

Seats,  berths,  or  state  rooms,  in  parlor  or  sleeping  cars  or  on  vessels-  63,  78 

Party   tickets 52 

Mileage  books 48 

Special  services  to  passengers 60 

Storage  of  baggage 57,  58 

Transportation  of  oil  by  pipe  line 67 

Elevation  of  property  transported,  transportation 2 

Emergency  conditions,  sale  of  property  under 82 

Employees  of  Government,  Federal,  State,  and  Territory,  exempt 72 

Employees  of  carrier,  transportation  of  property  of 21,  22 

Endorsement : 

Showing  payment  of  tax  on  mileage  books  sold  prior  to  November 

1,  1917 48 

Showing  payment  of  tax  on  ticket  sold  prior  to  November  1,  1917 45 

Evasion  of  tax,  penalty 92 

Evidence  of  right  to  governmental  exemption 71,  72 

Excess  baggage 56,  58 

Exchange  orders 54 

Exclusive  occupany  of  drawing  rooms,  compartments,  or  sections 60 

Exemption : 

Carrier  transporting  own  property 21 

Certificates.     (See  Certificates.) 

Commutation  or  season  tickets  for  trips  less  than  30  miles 62 

Foreign  ambassadors,  ministers,  and  diplomatic  representatives 73 

Freight  and  p«^sons  transported  under  cost-plus  contract 74 

Governmex-ital 68-83 

Governmental,  applies  to  accommodations  in  parlor  or  sleeping  cars 

and  on  vessels 78 

Governmental,  evidence  of  right  to 71,  72,  73,  74 

Governmental,  limited  to  performance  of  official  duties 78 

Governmental,  not  affected  by  payment  of  mileage  by  Government 78 

Government  agencies_l 70,  78 

Passenger  fares  less  than  42  cents 40, 42,  43,  62 

Payment  of  16  cents  or  less  for  freight  transportation 5 

Persons  carried  free  under  Federal  oi  State  laws 62 


mDEx.  43 

Biemptlon — Continued.  Art. 

Property  shipped  for  exportation __:_r___ 15 

Property  for  export  consigned  to — 

Food  Administration  Grain  Corporation [  15 

Director  of  Overseas  Transportation 15 

Britisli  Admiralty 15 

Transportation  of  commodities  necessary  to  carrier  business 23, 25 

Export,  cliarges  on  property  sliippetl  lor 15 

Export  representative,  exemption  of  property  for  export  consigaed-to 15 

Exportation,  transportation  of  property  in  course  of 15 

Express  and  freight  service,  combined 34 

Express  company  : 

Payments  to  carrier  for  use  of  facilities,  not  taxable 10 

Transportation  of  commodities  necessary  to 25, 36 

Express,  shipments  by 30 

Express  shipments,  tax  imposed  on  payments  by  consignor  or  consignee 10 

Express,  transportation  by 36-37 

Facilities  and  services: 

Taxable 8-14 

Payments  by  express  company  for  use  of,  not  taxable 10 

Used  in  connection  with  movement  of  property  or  persons,  trans- 
portation   2 

Failure  to  pay,  collect,  or  truly  account  for  taxes 92 

Failure  to  file  return  on  time 92 

False  or  fraudulent  return ;_  92 

Federal  control  constitutes  one  railroad  system 26 

Federal  Farm  Appraisers,  exempt,  Government  agency 70 

Federal  Land  Banks,  exempt.  Government  agency 70 

Federal  Reserve  Banks,  exempt.  Government  agency 70 

Feeding  live  stock,  transportation 2 

File  of  certificates  of  exemption  kept  by  carrier 83 

Food  Administration  Grain  Corporation,  United  States: 

Exempt,  Government  agency 70 

As  consignee 15 

Foreign  bills  of  lading,  tax  on  charges  of  property  imported  under 17 

Foreign  countries : 

Transportation  of  persons  to  or  from 38 

Property  passing  through,  between  points  in  United  States 20 

Transportation  of  persons  through,  between  points  in  United  States.  38 
Foreign  governments : 

Diplomatic  representatives  exempt 73,  78 

Services  to,  not  exempt 69 

Foreign  port : 

Transportation  of  persons  from  last  port  in  United  States  to 02 

Property  paasing  through  United  States  between 19 

Forms,  exemption  certificates,  furnished 76 

Forty-two  cents,  exemption  of  passenger  fare  less  than 40,42,43 

Fractional  part  of  cent,  as  tax 5 

Free   accommodations 64 

Free  of  charge,  transportation  of  property 21,22,23 

Of  persons 62 

Freight  and  express  sei'vices  combined 34 

Freiglit,  transportation  of 0-35 


44  INDEX. 

Art. 

Freight  transportation,  pnymont  of  IG  cents  or  less,  exempt 6 

Fuel  Administration,  United  States,  exempt,  Government  agency 70 

Government  agencies,   exempt 70,  78 

Government  contract : 

Cost-plus,   exempt ^ 74 

Liunp  sum,  taxable 77 

Governmental    exemptions 68-83 

Applies  to  accommodations  in  parlor  or  sleeping  cars  or  on  vessels 78 

Handling  of  property  transported,  transportation 2 

Hawaii : 

Exemption  of  charges  incurred  by  officials  and  employees 68,  72 

Tart  of  United  States 3 

Holding  corporation,  transportation  of  property  of 24 

Hotel  accommodations,  not  transportation 2 

Household  goods,  movement  of,  by  motor  vans 85 

Housing  Corporation,  United  States,  exempt.  Government  agency 70 

Icing  of  property  transported,  transportation 2 

Imported  property,  charges  on 17, 18 

Incidental  services  and  facilities,  transportation 2 

Indorsement  of  exemption  certificates 81 

Inspection  charges.  State,  not  ti"ausportation  charges 29 

Inspection  of  records  of  carriers 83 

In-transit  privileges 13 

Joint  use  of  terminal  or  yards,  commodities  necessary  for 25 

Land  banks,  Federal,  exempt,  Government  -agencies 70 

Liberty  Loan  Committee,  exempt.  Government  agency 70 

Lighterage,  transportation 2 

Live  stock : 

Export  of,  on  through  contract  to  Mexico  or  Canada 15 

Feeding  and  watering  of,  transportation 2 

Lump-sum  contracts.  Government,  transportation  under,  taxable 77 

Meals,  passengers',  not  transportation 2 

Materials  of  ctjrrier,  transportation  of 23,  25,  36 

Mexico : 

Cash  fares  to  points  In 51 

Exchange  orders  issued  in 54 

Mileage  book  purchased  in 48,50 

Through  bill  of  lading  to,  exempt 15 

Transportation  of  persons  between  points  in 62 

Transportation  of  persons  from,  to  United  States .  62 

Transportation  of  persons  to . 38 

Transportation  of  persons  from,  to  Canada 62 

Mileage  paid  by  Government  does  not  affect  governmental  exemption 78 

Mileage : 

Books 47-50 

Purchased  in  Canada  or  Mexico 50 

Refund  on  covers 89 

Unused,  bought  prior  to  November  1,  1917 44, 45,  46 

Milk,  transportation  of ^ 28 

Motor  povv-er,  transportation  by 35,  37, 38, 39 

Motor  vans 35, 37. 


INDEX.  45 

Art. 

Municipalities,  included  in  "  State  "  or  "  Territory  " 6S 

Navy,  officers,  exempt , 72,  78 

Newspapers,  transportation  of 28 

Official  duties,  limitation  of  governmental  exemption  to 78 

Officers : 

Of  Ai-my  or  Navy,  exempt 72,  78 

Of  carrier,  transportation  of  property  of 21,  22 

Of  State,  Federal,  and  Territorial  Governments,  exempt 72,  78 

Oil: 

Definition »>,«^         56 

Transportation  of,  by  pipe  line ^        67 

One  cent  on  20  cents,  tax : 

On  combined  express  and  freight  services S4 

On  express  shipments 86 

Overchax'ges,  adjustment  of 89 

Overseas  transportation,  director  of,  as  consignee 15 

Ownership  by  carrier  of  property  transported 21 

Panama  Canal  Zone,  shipments  to,  not  export IG 

Panama  Railroad  Co.,  exempt,  Government  agency 70 

Parlor  cars : 

Seats,  berths,  staterooms 63,  78 

Sections  or  compartments,  exclusive  occupancy  of 60 

Partial  use  of  ticket  purchased  prior  to  November  1,  1917 44 

Partnerships,  inclusion  in  "  person  " 3 

Party  tickets,  tax  on 52 

Passengers : 

Hotel  accommodations  not  transportation 2 

Meals  not  transportation 2 

Passenger  transportation 38-65 

Payment  of  taxes : 

By  whom 84 

Evidence  of 45 

Failure  to  make 92 

Total  upon  total  charges 12 

Penalties 92 

Perishable  property,  sale  of 32 

Person,   definition 3 

Persons  : 

Movement  of,  transportation 2 

Transportation  of 38-65 

Petroleum,  crude,  transportation  of  by  pipe  lines 66 

Philippine  Islands,  shipuients  to,  not  export 16 

Pipe  line,  transportation  of  oil  by 67 

Porto  Rico,  shipments  to,  not  export 16 

Prepaid  charges,  on  shipments  to  government 80 

Property : 

Movement  of,  transportation 2 

Transported,  handling  of,  transportation 2 

Transportation  of — • 

By  freiglit 6-35 

By  express 36, 37 


46  INDEX. 

Railroad  system:  Art. 

Carriers  part  of  same,  commodities  necessary  to 25,  26 

Carriers  under  Federal  control  constitute  one 26 

Receipt  of  property  transported,  transportation 2 

Records : 

Of  adjustments  kept  hy  carrier 89,  90 

Of  certificates  of  exemption,  kept  by  carrier 83 

Of  exempt  transportation,  kept  by  carrier 88 

Summaries  of 90 

Of  taxes  collected,  kept  by  carrier 87,  90 

Transportation  requests 83 

Reconsignment  of  property  passing  through  United  States  from  foreign 

country 19 

Red  Cross,  American  National,  exempt,  Government  agency 70 

Refrigeration  of  property  transported,  transportation 2 

Refusal  to  pay,  collect,  or  truly  account  for  taxes 92 

Regular  established  line,  definition 89 

Remittances : 

Failure  to  make 92 

When  and  how  made 91 

Request,  transportation,  form 72 

Returns,  when  and  how  made 91 

Revised  Statutes,  section  8176,  as  amended 92 

Road  haul  charge,  taxable,  when 9, 10 

Round-trip  ticket 40 

Bale : 

Of  perishable  property 32 

Of  property  under  emergency 32 

Of  unclaimed  property , 82 

Season  tickets . , 41 

Sale  prior  to  November  1,  1917 .  .      44 

Secretary,  means  Secretary  of  Treasury 3 

Separate  certificates  with  each  consignment 82 

Services  and  facilities  taxable 8-14 

Services  rendered  in  connection  with  movement  of  property  or  persons, 

transportation 2 

Shipping  Board  Emergency  Fleet  Corporation,   United    States,   exempt, 

Government  agency 70 

Sixteen  cents  or  less,  payment  for  freight  transportation,  exemption 5 

Sleeping  car : 

Seats,  berths,  or  staterooms 63,  78 

Sections  or  compartments,  exclusive  occupancy  of_ 60 

Soldier  traveling  on  furlough,  not  exempt 78 

Special  accommodations  for  passengers 63,  78 

Special  cars  or  trains  for  passengers 61 

Special  services  to  passengers 60 

Staking  property  in  cars,  charges  for 81 

State : 

Definition 68 

Exemption  of  charges  Incurred  by  oflicers  or  employees  of 68,  72 

Inspection  charges,  not  transportation  charges 29 

Stateroom  on  vessel  or  sleeping  or  parlor  car 63,  78 

Steamers,  sleeping  or  parlor  accommodations  on 60,  63 


INDEX.  47 

Art. 

Steamship  orders 55 

Stock  of  cue  corporation  owned  by  anotlier,  effect  of 24 

Storage : 

Of  property  transported,  transportation 2 

Of  baggage 57,  58 

Cliarges _, 30 

Subsidiary  corporation,  transportation  of  property  of 24 

Summaries  of  transactions  by  carrier 90 

Supplies  of  carrier,  transportation  of 23, 25,  36 

Switching  company,  facilities  furnished  for  or  by 25 

System: 

Railroad,  all  carriers  under  Federal  control  in  one 26 

Carriers  part  of  same ; 25,  26 

Telegraph  company,  transportation  of  commodities  necesstiry  to 25 

Telephone  company,  transportation  of  commodities  necessary  to 25 

Terminal  company,  transportation  of  commodities  necessary  to 25 

Terminal  service 14 

Territory : 

Definiton 68 

Exemption  of  charges  incurred  by  officers  and  employees  of 68,  72 

Thirty  miles,  trips  less  than 41 

Three  per  cent  tax : 

On  circus  trains 27 

On  combined  express  and  freight  services 34 

On  transportation  of  milk,  newspapers,  and  commodities 28 

Through  transportation,  between  foreign  ports 19 

Through  United  States: 

Transportation  between  points  in  Canada  or  Mexico 62 

Exchange  orders  issued  in  connection  with 54 

Tickets : 

Additional,  for  exclusive  occupancy  of  sleeping  or  parlor  car  com- 
partments or  sections 60 

Combination  of 43 

For  transportation  of  commodities,  in  book  form  or  bulk 28 

Round  trip 40 

Unused,  when  bought  prior  to  November  1,  1917 44,  45,  46 

Towage  charges,  when  taxable 11 

Towage  of  property  transported,  transportation L' 

Towns,  included  in  "  State  "  or  "  Territory  " 65; 

Training  Camp  Activities,  Commission  on,  exempt,  Government  agency •  70 

Transfer  in  transit  of  property  transported,  transportation 2 

Transportation : 

Completed  prior  to  November  1,  1917 7 

Date  of,  determine  tax 6,  7 

Defaiition 2 

Transportation  requests,  form 72 

Trimming  of  cargo  in  vessels,  transportation 2 

Trips  less  than  30  miles 40 

Under  charges,  adjustment  of 89 

United  States : 

Definition 3 

Property  passing  through 19 


48  INDEXi 

Art. 
Unclaimed  property,  sale  of 32 

Unused  mileage  books,  bought  prior  to  November  1,  1917 44,  45,  46 

Unused  tii-kets,  bouirht  prior  to  November  1,  1917 44,45,40- 

Vans,  motor 35 

A'entilation  of  property  transported,  transportation 2 

A'essels,  trinnning  of  cargo  in.  transportation 2 

Virgin  Islands,  shipments  to,  not  export 16 

War  Savings  Connuittee,  exempt,  (Jovernment  agency 70 

Water-haul  charge,  taxable,  when 9, 10 

War  Industries  Board,  exempt,  Government  agency 70 

Water  service 14 

Watering  live  stock,  transportation 2 

AVharfage  of  property  transported,  transportation 2 

Zone  system  of  collecting  fares 42 

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